France eyes boost for private equity, banking

France eyes boost for private equity, banking

By Leigh Thomas

PARIS (Reuters) – France aims to make it easier for private equity funds to invest in listed companies and less costly for finance firms to let go of traders under a new bill going to parliament next month, lawmaker Alexander Holroyd said on Monday.

Outlining the government-backed bill, Holroyd said that French law needed to be adapted for companies to secure more financing while making Paris a more attractive financial hub for international banks and investors.

For private equity firms, the bill would allow them to invest in French firms with a market capitalisation of up to 500 million euros ($547 million), raised from a limit of 150 million currently.

Holroyd, a member of parliament in President Emmanuel Macron’s ruling party, said that potentially meant private equity could invest in 88 more French firms than currently.

The bill also aims to make an exception under French law, which is generally highly protective of employees, for dismissing highly paid traders so that their severance packages are less costly for their employers.

Holroyd acknowledged that it would be far from easy to make legislation singling out certain employees for exceptional legal treatment, but said the measure targeted traders at banks and hedge funds as well as commodity and energy trading companies.

The measure has been sought by some Wall Street banks operating in France because of the bigger severance packages they have to pay traders than in other major financial centres.

France has been keen to attract high-paying finance jobs to the French capital since Britain’s 2017 vote to leave the European Union.

After the decision, the government introduced tax breaks and other incentives to lure international banks from London to Paris rather than other European finance capitals like Frankfurt and Milan.

Several big Wall Street banks such as Bank of America and JPMorgan set up regional trading hubs in Paris, generating more than 5,000 new jobs in the sector.

“Europe’s true existential problem is how we finance our economy,” Holroyd told journalists. “If we are able to resolve this problem, we will attract investors.”

Among other measures, the bill aims to ease rules for raising fresh capital to better align French law with norms in some other European countries and the United States.

While French law currently gives more protection to existing shareholders than other countries, the bill would give company’s management more leeway in setting the price when they try to raise fresh capital in a measure sought in particular by start-ups.

The bill, drawn up by Holroyd in coordination with the finance ministry, also seeks to transpose into French law a United Nations agreement on digitalising the considerable paperwork that banks in trade finance have to handle when their clients ship goods internationally.

($1 = 0.9141 euros)

(Reporting by Leigh Thomas)