- 2 min
Are you familiar with the ACPR?
The French Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution – ACPR) assumed its current form when several supervisory and regulatory bodies were merged in 2010. It was created in response to the subprime crisis and calls for a reform of the financial system. The ACPR supervises the French financial sector, i.e. banking and insurance.
The ACPR is an independent administrative body affiliated with the Banque de France. It has a budget of €196 million. This budget is almost exclusively funded by contributions paid by the organisations under its control. It employs over 1,000 people.
Last year, the ACPR’s Sanctions Committee ruled on eight cases that resulted in penalties amounting to €25.8 million, against €6.4 million in 2016. These cases mainly concerned two banks which were found guilty of failing to meet their obligations concerning measures to combat money laundering and the financing of terrorism.
In March 2018, SGP, a Le Havre-based brokerage firm, was also sanctioned by the regulator for failing to provide adequate advice in its distance marketing of policies (funeral insurance, personal accident cover and long-term care policies), on grounds of there being insufficient information about the coverage provided in its solutions and the qualifying periods for benefits.
The ACPR is divided into four main entities:
• The Supervisory Board which is responsible for defining the general supervisory and operational guidelines of the Authority. It is chaired by the Governor of the Banque de France, François Villeroy de Galhau, and consists of 19 members. The Chairman guarantees the consistency of the Authority’s activities. The General Secretariat of the ACPR reports to the Chairman directly; its main responsibilities include accreditations, individual audits based on records and on-the-spot checks, audits of commercial practices and inspections of anti-money-laundering systems.
• The Sanctions Committee is legally empowered to impose disciplinary sanctions on establishments in which breaches of the legal and regulatory provisions are observed. It is independent of the ACPR Supervisory Board which is responsible for prosecutions.
• Three Advisory Committees – Prudential Affairs, Anti-Money-Laundering and Commercial Practices – which make their expertise on specific subjects available to the Board.
• The Scientific Committee promotes synergies between research in the financial sector and prudential supervision.
It has the following missions:
The ACPR is responsible for “preserving the stability of the financial system and protecting the customers, insurance policyholders, members and beneficiaries of the persons that it supervises.”
It contributes to financial stability:
• It issues accreditations for new operators, such as insurance and reinsurance firms, mutual insurance companies and unions of mutual insurers, etc.
• The appointment of executive directors and holders of key posts in insurance companies is also subject to its approval.
• It performs inspection missions in banks and insurance companies by carrying out on-the-spot checks and audits based on records.
• It ensures compliance with the financial rules and standards defined at the national and international levels, such as the solvency criteria drawn up by the Basel Committee.
• Since 2016, the ACPR has also been charged with preventing and addressing the difficulties of insurance organisations.
• The ACPR must also anticipate emerging risks relating to the growing power of FinTechs, cyber-risks and climate risks.
It protects consumers by:
• Monitoring compliance with the legislative and regulatory provisions applying to the protection of consumers
• Ensuring compliance with codes of good practice.
In association with the Banque de France, the ACPR and the French stock market regulator (AMF) have also developed the Assurance Banque Epargne Info Service website which provides information for the general public on issues such as how to avoid being defrauded. This system also includes a telephone hotline for people in difficulty. Lastly, the ACPR represents France in bodies responsible for devising international prudential regulations. In particular, it collaborates with the European Insurance and Occupational Pensions Authority (EIOPA) and ensures the transposition of the European regulations into French standards.
According to the 2017 Annual Report, available here, the audit and control priorities for 2018 focus on six priority areas: prudential supervision, customer protection, measures to combat money laundering and the financing of terrorism, regulation, emerging risks and resolution.