The AMF and the ACPR clarify the regulation of advisory activities in the sale, transfer and acquisition of businesses

The AMF and the ACPR clarify the regulation of advisory activities in the context of business transfers and acquisitions

The Autorité des marchés financiers (AMF) and the Autorité de contrôle prudentiel et de résolution (ACPR) have clarified the legal qualification of advisory services provided to natural or legal persons in connection with the sale/transfer/acquisition of a company, external growth transactions, the opening of capital or the raising of funds and, where applicable, in the search for financing for these transactions (“equity advisory services”).

The services of “M&A advisory”, “corporate finance advisory”, “business transfer advisory” or “equity advisory” are provided both by unregulated professionals and by regulated players such as investment services providers (ISPs) or regulated legal and accounting professions (lawyers, notaries or chartered accountants). The AMF and the ACPR have published a position paper to assist players who are wondering about the qualification and legal regime of their activity.

The supervisors specify to what extent and under what conditions the activities referred to under the generic term of “high net worth advisory services” fall under the related service n°3 of article L 321-2 of the Monetary and Financial Code and can, therefore, be carried out without any license or specific professional status.

The AMF and the ACPR clarify the boundaries between capital adequacy advice, which is free to practice, and non-guaranteed investment services and investment advice, which may only be provided by regulated professionals. The distinctive criteria set out relate, in particular, to the nature of the due diligence carried out to understand the client’s needs, the due diligence carried out to meet those needs, whether or not the financial terms of the proposed transaction are fixed, and the intuitu personae attached to the transaction.
It is up to the professional to carry out an analysis to determine whether the service proposed falls within the scope of a particular service and to ensure that he has, where appropriate, the appropriate authorisation or professional status to provide it.