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Legal Briefing: Listing ETF's in France

It is likely that foreign ETFs (that is, non-French) will explore offering their shares to French and other European investors. What are the applicable listing procedures and how can obstacles be avoided?

Exchange-traded funds may become the future of listed asset funds. They have more than $700 billion in assets under management. Despite the world financial situation, they are expected to have $2 trillion by 2011. The next boom will be in Europe, where only 10% of investors invest in ETFs. The same rationale applies to France and NextTrack, the market segment dedicated to trackers where ETFs have quintupled over the past three years. It is likely that foreign ETFs (that is, non-French) will explore offering their shares to French and other European investors. What are the applicable listing procedures and how can obstacles be avoided?

French approval
Under French law, ETFs are characterised as collective investment schemes, or OPCVM. As such they must obtain the approval of the Autorité des marches financiers (AMF) before any marketing of their shares in France.

To determine which procedure is applicable to foreign ETFs, the funds have been divided into two types: (i) harmonised European ETFs, which are incorporated in the EU and are eligible for the mutual authorisation recognition procedure provided by Directive 85/611/EEC; and (ii) non-harmonised ETFs, which are other European and foreign ETFs.

Harmonised European ETFs benefit from a European passport.

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