The AMF adapts its doctrine on complex financial products in response to the rise of crypto-assets

The implementation of the European Regulation on Markets in Crypto-Assets (MiCA) and the emergence in Europe of crypto-asset backed financial products have led the AMF to make targeted changes to its doctrine on complex products. The AMF recalls that crypto-assets can be subject to sharp fluctuations in price.

Against the backdrop of the entry into application, on 30 December 2024, of the Regulation on Markets in Crypto-Assets (MiCA), which provides a harmonised framework for service providers operating on this market and imposes transparency obligations for crypto-asset issuers, the AMF has decided to adapt its doctrine on complex financial instruments to take account of the emergence in Europe of structured products that are linked to crypto-assets. Given investors' interest in crypto-assets, whether these are held directly or through financial products, the AMF has noted that certain crypto-assets, provided they meet predefined conditions, are no longer unusual for retail clients. The amendments will make it possible to take account of these new practices, while at the same time providing greater protection for retail investors vis-à-vis complex products.

Targeted changes in policy

The AMF's policy on complex products aims to reduce the information asymmetry that exists between retail investors and the producers or distributors of these products.

In an initial position (DOC-2010-05), it set out four criteria for assessing whether financial instruments present a risk of a retail client not understanding the risks or a financial instrument properly. When a financial security fails to meet one of these criteria, the AMF considers that there is a risk that it will not be marketed properly to the general public and requires that its promotional marketing materials contain a dissuasive warning aimed at investors. This states that: "the AMF considers that this product is too complex to be marketed to retail investors and has therefore not reviewed its marketing materials".

In a second position (DOC-2013-12), the AMF highlighted this same risk of mis-selling to the general public in the absence of a guarantee offered for complex debt securities issued by dedicated issuance vehicles and marketed to the general public.

Today, the AMF is clarifying these two positions to bring them into line with the boom in crypto-assets, which may now, under certain conditions, be used as underlying assets for exchange traded notes (ETNs) linked to crypto-assets without this warning.

Four cumulative conditions must be met

To protect investors, the AMF has defined four cumulative conditions to take advantage of this flexibility:

• the quality of the crypto-assets to which the debt securities will be linked: the crypto-assets will have to have a capitalisation of at least €10 billion and an average daily trading volume of at least €50 million over the 30 days preceding marketing, and be tradable on a platform that has obtained MiCA authorisation. Baskets of crypto-assets will be permitted if the majority of their constituent crypto-assets meet these capitalisation and liquidity criteria;
• product structure: the AMF requires that there be no leverage or discretionary component;
• the nature of the exposure to crypto-assets: exposure must be through the direct holding of crypto-assets by the entities issuing the debt securities or through securities issued or guaranteed by regulated entities, or through regulated instruments;
• custody of crypto-assets: this must, imperatively, be entrusted to a service provider that has obtained MiCA authorisation for this service.

Regulated financial instruments

Unlike directly held crypto-assets, crypto-asset-linked complex debt securities are financial instruments and, as such, fall under the Regulation on Markets in Financial Instruments. This means that the investor protection rules set out in this regulation must be complied with, including the obligation to define a target market for a product and to ensure, when providing advice, that it is suited to the profile and needs of retail investors. In addition, prospectus approval may be required above certain thresholds.

The AMF reiterates that these financial instruments are still complex products and are not suitable for all investor profiles, and that crypto-assets can be subject to sharp price fluctuations. The AMF will carry out a review of this change to its doctrine in the first half of 2027.

About the AMF
The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets.Visit our website: https://www.amf-france.org/en

Press contact

Read more

• Commercialisation des instruments financiers complexes auprès d'une clientèle non professionnelle : l'AMF adapte ses positions DOC-2010-05 et DOC-2013-12 (In French only)
• Position DOC-2010-05 - La commercialisation des instruments financiers complexes (In French only)
• Position DOC-2013-12 : Position DOC-2013-12 : Nécessité d'offrir une garantie (de formule et/ou de capital selon les cas) pour les OPCVM et FIA structurés, les OPCVM et FIA « garantis », et les titres de créance structurés (In French only)