Banking and financial law

Monegasque financial law is mainly governed by Law No. 1.338 of 7 September 2007 on financial activities (recently modernised in depth by Law No. 1.515 of 23 December 2021), Law No. 1.339 of 7 September 2007 on mutual funds and investment funds, and their respective implementing Sovereign Orders No. 1.284 and No. 1.285 of 10 September 2007.

Franco-Monegasque relations give rise, on the one hand, to a duality of law applicable in the Principality of Monaco, with banking and credit activities carried out in Monaco following, in principle, the rules of French legislation, and on the other hand, to the constraints imposed by the French and Monegasque supervisory authorities:

• Under the Franco-Monegasque Convention of 14 April 1945 on exchange control, as specified by subsequent agreements in the form of exchanges of letters, French rules concerning banking regulation and organisation, the form and trading of securities, the organisation and operation of the financial market, apply in principle to Monaco;
• Under the Monetary Agreement of 29 November 2011 between Monaco and the European Union, the European Union acts listed in its Annex A (Legislation applicable to the activity and supervision of credit institutions and to the prevention of systemic risks in payment and securities settlement systems) are applicable in the Principality as soon as they are included in French law.

Thus, the regulatory and prudential organisation of banks is governed by the French Monetary and Financial Code, whereas relations between banks and their clients are governed by Monegasque law.

Portfolio management companies are authorised by the Monegasque "Commission de Contrôle des Activités Financières" (CCAF), an ordinary member of the International Organisation of Securities Commissions (IOSCO) since 2022.

Banking institutions are authorised by the French "Autorité de Contrôle Prudentiel et de Résolution" (ACPR), and the CCAF for their financial activities.

In addition, the Principality implements legal provisions equivalent to those of the European Union acts which appear in Annex B of the Monetary Agreement of 29 November 2011 in terms of prevention of money laundering, fraud and counterfeiting, compensation of investors, as well as measures to freeze funds and economic resources in application of international sanctions (UN, EU, France) and economic restriction measures.

Underneath this apparent clarity, the question of the scope of application of French and European legislation to Monegasque credit institutions arises recurrently in practice.

Monegasque financial institutions also have due diligence obligations under the OECD's Common Reporting Standard on Financial Accounts (CRS). The Principality is party to the Multilateral Convention on Mutual Administrative Assistance and the Multilateral Agreement between Competent Authorities on Financial Accounts. The TAXUD Agreement constitutes the legal and operational basis for the automatic exchange of information on financial accounts between Monaco and the Member States of the European Union.

• The right to a bank account was introduced by Law No. 1.492 of 8 July 2020, which also provides for the obligation to open an account in a credit institution in Monaco for any natural person exercising a professional, craft, commercial or industrial activity (for the exercise of his professional activity), as well as for any limited company, general partnership, limited partnership with shares or limited liability company (exclusively intended for the exercise of a professional activity).
• Law No. 1.503 of 23 December 2020 reinforcing the system for combating money laundering, terrorist financing and corruption introduced the register of bank accounts and safe deposit boxes ("Registre des comptes bancaires et des coffres-forts") and established consolidated supervision of banking and insurance groups.
• Law No. 1.515 of 23 December 2021 reforming Law No. 1.338 modernised the statement of financial activities, strengthened the missions of the CCAF including supervision, enacted stricter rules on conflicts of interest, clarified the rules on canvassing on Monegasque territory, increased criminal sanctions, rewrote the offences of market abuse (insider dealing, disclosure of privileged information, dissemination of false and misleading information) with the introduction of the offences of market manipulation.
• Law No. 1. 521 of 21 February 2022 on various criminal measures to combat money laundering and fraud and counterfeiting of non-cash means of payment recast the offences related to the fraudulent use of material and non-material non-cash payment instruments (in accordance with Directive (EU) 2019/713), and introduced a procedure for monitoring banking transaction under investigative powers and techniques (in line with the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism).
• Law No. 1.522 of 11 February 2022 on benchmarks addresses the issue of their discontinuation or abandonment (such as LIBOR and EONIA), as many contracts for loans, time deposits, securities and derivatives refer to such benchmarks.
• Law No. 1.528 of 7 February 2022 established a secure and risk-limiting framework for the exploitation of the opportunities offered by the digital finance sector.
• Law No. 1. 529 of 29 July 2022 extended the pledge to structured financial products, adapted the terminology of the Commercial Code to the terms of European financial market regulations, enabled credit institutions to grant assistance to companies in difficulty without the risk of being accused of abusive support, introduced into Monegasque law the assignment of professional receivables on the model of the French "Bordereau Dailly" (only credit institutions and finance companies may be assignees), enshrined the professional certification of financial activities in Monaco, created new provisions relating to the relationship between authorised companies and their clients in order to meet the obligations to which producers of financial instruments located abroad are subject, and relating to solicited and unsolicited approaches by non-authorised companies to offer financial services or products.
• Law no. 1.561 of 2 July 2024 created a right to be forgotten (loan insurance) and other measures facilitating access to credit for certain business loans and property loans for people with an aggravated health risk.

• Parliamentary draft law no. 263 adopted on 17 October 2024 envisages strengthening the effectiveness of the right to a bank account introduced by Law no. 1.492 of 8 July 2020 (conversion into a bill validated by the Government).