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Soc Gen to have trading subsidiary in France

img_0232Societe Generale has established a separate French subsidiary to handle its proprietary trading activities. The unit would be created to allow it to comply with new French banking law, which requires the country’s lenders to ring-fence speculative trading activities by housing them in a subsidiary separately funded from the rest of the bank. The previously unreported plans for the subsidiary were stated in a Societe Generale investor day presentation in May, in which it said the unit would be responsible for around 2% of the group’s revenues. France, along with Germany and the UK, has already adopted separate national ring-fencing legislation, ahead of proposed EU banking reforms, based on recommendations by Finnish central bank. The reforms are set to mimic the US Volcker Rule, which is set to take effect from next year and prohibits banks from proprietary trading or holding stakes in private equity firms.

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