France: Financial Sector Assessment Program-Technical Note on Supervision of Liquidity Risk in Investment Funds and the Oversight of Trading Activities

Financial markets in France have evolved since the previous FSAP, particularly in respect of wholesale markets. France has attracted new types of trading activities and there is movement towards consolidation in the wholesale trading and asset management sectors. Such changes have often increased the complexity of markets within France, and in turn the complexity of supervision. At the same time, in some areas there has been a trend towards simplification and standardization in offerings, such as through Exchange Traded Funds (ETFs) and neo-brokers. There have also been significant regulatory changes, and the requirements for liquidity risk management within funds were changing at the time of the mission. The responsibilities of regulators have also grown, with new obligations to supervise against matters such as digital asset markets, sustainable finance, and digital operational resilience.