Understanding how the Stock Exchange works


The stock market is a regulated market that brings together companies with funding requirements and investors, including individual investors.

Shares are bought or sold through a stock order.

In practice
How to choose your stock exchange order ?

To trade on the stock exchange, you can place an order with your regular financial intermediary.

The 3 most frequently used stock orders are as follows:


- Maximum purchase price or minimum sell order (limit) to be set by you. 
- The order is executed only when the price is lower or equal to this limit for the purchase, or higher or equal to this limit for the sale. 
- If the quantity of negotiable shares on the market is not available at the set limit price, the execution of the order may be partial.


- You have not indicated an exact price. 
- The order will be executed at the best price available when it reaches the market, for both buy and sell orders. 
- If the quantity of negotiable shares is not available at this best price, the execution of the order may be partial.


- There is no price limit on this order.
- But, this order is given priority over all other types of orders and its execution is fully completed.


Share ID sheet
- Value Code : ISIN FR0012938884
- Number of shares : 581,530,579 shares
- Closing price : 0.993 €
- Market capitalization : €577 million


The gain on the sale of shares is called a “capital gain”. It is the difference between their sale amount and their purchase amount.

The elements of taxation described in this factsheet are applicable to French residents for tax purposes.


SHARE SALE AMOUNT (Unit sale price x number of shares)
Sale transaction fees and taxes



(Unit purchase price(a) x number of shares)
Purchase transaction fees and taxes

This information is included in your sale transaction statement  

This information is included:
• for purchases, in your purchase transaction statement,
• for gifts, on your 2735 gift form or notarial deed,
• for an inheritance,on the 2705 and 2706 inheritance declarations forms.

  Capital gains on sales realized in 2016 are subject to income tax based on a progressive scale. They may be reduced by capital losses on your portfolio incurred during the same year or capital losses that have not been deducted but were realized in the previous 10 years. The social contributions rate is 15.5%. It is applied to the capital gain before deduction.

    Tax deductions

    Capital gains are subject to a tax deduction based on how long the shares have been held since their acquisition date:

    - 50% for a share holding period from 2 to 8 years;

    - 65% for a share holding period of 8 years or more.

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    The alternatives that provide exemption from capital gains tax are as follows:

    - Having a share savings plan, and keeping your shares for a period of five years from the account opening date. The capital gains realized after this period are only subject to social security contributions. Important: shares from another account cannot be transferred to a share savings plan. Only transfers from the share savings plan’s cash account can be used to invest in shares. The cash investment limit is €150,000 per plan.

    - Making a gift is still fully exempt from rights, taxes and social contributions up to maximum amounts set by French law. Unrealized capital gains on shares are then tax exempt, as long as the transaction is reported to the tax authorities (see pages 46-47 on passing on shares and taxation). Plan to make your end-of-year gifts from September.

    Deduction of losses
    The losses are attributable without a tax deduction on the capital gains. To determine the taxable amount, the balance obtained in this way benefits from the tax deduction linked to the holding period for sold shares that resulted in a capital gain. The taxpayer is responsible for calculating and declaring in the 2042 form the net amount of the tax deduction f or the holding period applicable to the capital gains (page 3, box 3SG) and the net amount after the tax deduction (page 3, box 3VG if taxable capital gain or box 3VH if loss). The 20 74 form can be used to itemize your calculations.



    - Wealth tax: choose the right calculation method

    - The value of your share portfolio is included in your taxable assets for the “Impôt de Solidarité sur la Fortune (ISF)”, or “wealth tax”. The tax authorities allow two ways of valuing your assets: either the closing price for the SoLocal share; or the average closing price for the last 30 trading days for the SoLocal share. The tax administration allows taxpayers to choose the most advantageous valuation for each share in their portfolio. This information appears on you recent account statement or can be consulted in your personal online account

    New: tax on financial transactions
    From January 1, 2017, the tax rate on share acquisitions changed from 0.2% to 0.3%. Please note that this tax applies only to share purchases. The 2017 Finance Tax states that this increase applies to transactions negotiated on December 29 and 30, 2016 and completed from 2017.


    Passing on your shares in advance allows you to benefit from an advantageous tax framework, encourages your loved ones to save and educates them about the stock market. You thereby also share your commitment to the SoLocal Group.

    The elements of taxation in this factsheet apply to French residents for tax purposes.



    Facilitated transmission of your shares to your loved ones



    • Tax advantages
    • Written agreement from both parties. In order to value the shares passed on, the grantee’s local tax authority must be notified of the gift within one month, using French tax form 2735 
    • Hand-to-hand gifts have to be added to the grantor’s estate and included in the allocation of the grantor’s assets
    • Acquisition price valued at the average share price on the day of the tax declaration or, if this is higher, at the average price on the day of the gift




    Anticipated total or partial allocation of your shares to your children



    • Donation only to children
    • Tax advantages
    • Lower inheritance taxes
    • Notarial deed and declaration of the gift carried out by the notary
    • Not added to the grantor’s estate
    • Acquisition price valued at the average share price on the day of the gift or at the closing price of the previous trading day





    Anticipated allocation of your shares to the beneficiary of your choice



    • Tax advantages
    • Notarial deed and declaration of the gift carried out by a notary
    • May be added to the grantor’s estate
    • Acquisition price valued at the average share price on the day of the gift or at the closing price of the previous trading day




    A present given on a special occasion (wedding, birthday, Christmas, etc.)


    • Must represent a relatively small share of the grantor’s assets
    • Does not need to be declared to the fiscal authorities
    • Not added to the grantor’s estate
    • Acquisition price of zero: when these shares are s old, the c apital gain r ealized will be equal to the total net sale amount

      - Inheritance: the choice is yours!

      • You can decide how your assets, including your share portfolio, will be distributed among your heirs. 
      • Upon your death, a declaration signed by your notary stating your marital status, the names of all beneficiaries and the number of shares attributed to each beneficiary is sufficient to distribute a portfolio. 
      • Your financial establishment for intermediary registered shareholders and bearer shareholders, will execute all instructions given by your notary or the person managing your estate

      Examples of situations
      1.    Inter-vivos distribution donations allow you to pass on your shares while continuing to receive the dividends, i.e. retain the usufruct. The usufruct can be full or partial. Donation rights are reduced as they are based on the bare ownership value of the donation. French solidarity tax on wealth (IFS) is imposed on the beneficial owner. On the death of the grantor, the bare owners recover the usufruct and therefore full ownership of the shares. Dividends from free shares attributed after the donation are also paid to the beneficial owner.
      2.    The ban on giving up your shares prevents the sale of the shares or their donation for a set period.
      3.    The right of return allows the grantor to take possession of the shares again if the grantee dies first.

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      Tax exemption for donations

      Every 15 years you are able to make a tax exempt donation for up to:
      - 100,000 € for each child and from each parent
      - 80,724 € for a spouse or civil partner
      - 31,865 € for each grandchild
      - 15,932 € for each brother and sister
      - 7,967 € for each nephew or niece
      - 5,310 € for each great grandchild