derogatory assets

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DNCA EVOLUTIF
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[PDF]
Prospectus du Fonds Commun de Placement CENTURION
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Les OPCVM peuvent détenir jusqu'à 10 % en cumul des actifs dérogatoires suivants : ... A l'intérieur des actifs dérogatoires, aucune règle de division des risques ne ...
amf-france.org/BIO/BIO_PDFS/NIP_NOTICE_PRODUIT/116380.pdf
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High-yield debt - Wikipedia, the free encyclopedia

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en.wikipedia.org/wiki/High-yield_debt - 85k
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Junk Bond Definition
Junk Bond - Definition of Junk Bond on Investopedia - A bond rated 'BB' or lower because of its high default risk. Also known as a "high ...
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Investing in corporate bonds - junk bonds - MoneyWeek
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As a heading, this one is cryptic enough in French (unless the dérogation in question has already been explained in the text). A cryptic English translation will be worse than useless in the English version of the prospectus.

A cross-reference in Art. 411-34 of the RG AMF points to Article *R*214-28 of the MonFin Code, which reads as follows:
"III.-Par dérogation à la limite de 10 % fixée à l'article R. 214-6, un organisme de placement collectif en valeurs mobilières indiciel ou un organisme de placement collectif en valeurs mobilières à gestion indicielle étendue peut employer jusqu'à 20 % de son actif en instruments mentionnés aux a, b, d et f du 2° de l'article R. 214-1-1 d'un même émetteur.
Par dérogation à l'alinéa précédent, la limite de 20 % peut être portée à 35 % pour une seule entité.
IV.-Les organismes de placement collectif en valeurs mobilières à gestion indicielle étendue ne bénéficient pas d'une procédure de reconnaissance mutuelle des agréments au sens de la directive
85 / 611 / CEE du Conseil du 20 décembre 1985 susmentionnée lorsqu'ils utilisent la dérogation prévue au premier alinéa du III."

This would appear to be the derogation at issue.

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Note added at 7 hrs (2011-05-13 19:07:29 GMT)
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"Derogatory" does retain a relative obscure sense in legal English that is close to the French meaning. If you were dead set on using the word, though, the modificand would have to be the Code provision that provides the exemption -- NOT the assets that come under the exemption.

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Note added at 12 hrs (2011-05-13 23:56:31 GMT)
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Sorry, wrong derogation. The relevant one is Article R214-5:
"Article R214-5
Par dérogation aux dispositions de l'article R. 214-1-1, l'actif d'un organisme de placement collectif en valeurs mobilières peut également comprendre dans la limite de 10 % :"
to which R214-28 makes a further derogation.

No wonder the F>E translators are using the "other eligible assets" formulation.

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Note added at 17 hrs (2011-05-14 05:18:03 GMT)
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I retract the "in excess of" but leave the answer here for information.

I think they may be referring to what are called "alternative assets", which are defined in the investopedia.com and wikipedia.com links below.

These are essentially assets not found in a traditional investment portfolio, which looks like it fits here.

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Note added at 14 hrs (2011-05-14 02:31:13 GMT)
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I'm really surprised this has generated so much consternation. If you do a google search of "actifs dérogatoires" you will get more than a thousand hits, and notice that the term is sometimes used alternately with the English loan word "alternative" as relates to portfolio investment assets.

It is a broad category described in the Wikipedia entry as 'loose'.

Neither 'alternative asset' or 'actif déroger' contains in its meaning any judgment as to eligibility or suitability for a particular fund, or implies any percentage limit whatsoever of a fund.

Such limits will be clearly stated in a prospectus, and never, ever, just implied.

Analysing the term etymologically can help a little. To "déroger" is to "depart from something", a practice, a rule, standard, tradition, etc. That is exactly what the Wikipedia and Investopedia definitions mean when they describe "alternative' as "non-traditional': they depart from traditional practice.

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Note added at 15 hrs (2011-05-14 02:57:34 GMT)
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Here is an example relating "dérogatoire" with the English loan word "alternative":

Le fonds utilisera dans le cadre de son ratio dérogatoire (10% de l’actif du Fonds) des stratégies «alternatives» à travers un EMTN reflétant la performance de fonds de fonds alternatifs français ou en direct sur des Fcimt.

This is from a mutual fund prospectus at:

seven-cm.com/assets/pdf/SWAA_FundII_Prospectus_Simplifie.pdf

It has illuminating usage of the terms "dérogatoire", "classique" and "traditionnel" in accordance with the definitions on Investopedia and wikipdedia.

The term "actifs non classiques is also used.

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Note added at 1 day5 hrs (2011-05-14 16:44:37 GMT)
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Copied from discussion:
"This has nothing to do with qualifying assets as eligible or not or with any law or directive. This is just a heading.

If we had access to the other headings, we would probably find that they are something like:

1. "Equities/Stocks"
2. "Fixed Income/Bonds"
3. "Real Estate/REITS"
4. "Cash"

To this list would be added another category which is assets not belonging to those traditional classes:

5. Alternative Assets
(and then the list:)

1. warrants
2. short term borrowings instruments (commercial paper, etc.)
3. promissory notes
4. CMOs (collateralized mortgage obligations)
5. Shares in funds chartered under foreign law that satisfy the criteria of article 411-34 of AMF rules except for quoted index funds (UK: "trackers") whose eligibility is broader (for foreign investment funds the managing company must file an activity report from the very first euro invested).

There is absolutely no implication that these assets are eligible or not for any thing and that question is not even addressed in the term "dérogatoire".


And yes, yes, yes... it is "other assets", that might be a reasonable answer, but the convention in investment fund jargon is "alternative assets". The root of "alternative" is the Latin word for "other".

"Alternative assets" are what financial professionals formally call "other assets", or assets in other categories.

To add in 'eligible' is to read something into the French that is not there, eligibility being addressed separately and carefully. They assets may very well be eligible and it may be assumed probably are; that term does not tell us that, or even address the issue."

As cc in NYC points out that there are fewer hits for "actifs dérogatoires" than for "alternative assets". That is probably because the English loan word has become so broadly used. Where English loan words are used, there will often be a "pure French" equivalent synonym used alternately. Another synonym that is used for alternative assets is "actifs non classiques".

And one reason you will get vastly fewer hits in French than English is that alternative assets are used vastly more in the US than in France.

I understand "actifs dérogatoires" to be a synonym of "actifs alternatifs/'alternative" and "actifs non-classiques". It might behoove the asker to ask the client if that is what he/she means, and if there is any nuance the author meant to infer by using that term rather than "alternative/alternatifs or "non-classiques".