French Equity Savings Plan (PEA) & Brexit – Which impact on funds invested in British securities?

The 6 February 2019 French government Regulation on measures to prepare for the Brexit with regard to financial products mitigated the consequences of a withdrawal without agreement on the eligibility of British securities for the French Equity Savings Plan (PEA).

Securities eligible to the PEA are those issued by companies registered in an EU (or EEA) member state as well as units of collective investment funds with at least 75% of their assets invested in securities of EU (or EEA) companies.

The Brexit should then lead to the exclusion of UK securities and UK collective investment funds from the PEA.

This should also have consequences on other collective investment funds, which hold UK assets for the computation of the 75% ratio.

French government Regulation No. 2019-75 of 6 February 2019 therefore provides the temporary extension of the eligibility for the PEA of British securities and units in collective investment funds acquired before the Brexit date. A ministerial order of 22 March 2019 further specifies the duration of this extension:

  • Securities of UK issuers subscribed or acquired before the date of a no deal Brexit will remain eligible for a 15-month period
  • Units or shares of UK collective investment funds subscribed or acquired before the date of a no deal Brexit will remain eligible for a 15-month period
  • Collective investment funds units will remain eligible for a period extended to 21 months, provided that their management company agrees to comply with the investment ratio in EU non-UK companies (75% of the assets) and thus remains eligible for the PEA at the end of this period. If not, the eligibility period remains of 15 months

Management companies of collective investment funds must inform the account holder, within 3 months of the date of a no deal Brexit, of their intention to remain eligible or not for the PEA.

The account holder must also inform the PEA owner within 4 months in the event the securities are no longer eligible.

Our team would recommend determining post Brexit strategy, and eventually taking advantage of these measures to adjust their investment planning in order to maintain the eligibility of their funds for the PEA. 

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Alexis Fillinger

Alexis Fillinger has more than 11 years of practicing. He advises both companies and individuals on personal tax matters, in international context He is specialized in the structuring of investment […]