Acting chiefly through its Corporate Finance Committee, AMAFI is keeping close tabs on work being done to revise the Prospectus Directive. Following a legislative process that resulted in the publication in June of the new Prospectus Regulation, some of whose provisions are already applicable even if the bulk of the regulation will not come into effect until 20 July 2019, ESMA is now taking the lead on this matter. At the start of the summer, it published three consultation papers on Level 2 measures that it plans to propose to the European Commission. The consultations, which close at the end of September, cover the format and content of the prospectus, prospectus scrutiny and approval, and the EU growth prospectus, which is a break-through innovation under the new regulation aimed at making it easier for smaller firms to access market financing.
AMAFI submitted some mainly technical observations about ESMA’s proposed implementing provisions. Generally speaking, however, the desire to streamline the content and, by extension, the cost of prospectuses in some cases (not only for SMEs but also, for example, for secondary issues) and the introduction of a universal registration document modelled closely on the French registration document are welcome innovations within the framework of the Capital Markets Union initiative (AMAFI / 17-61).
At the end of July, AMAFI sent the European Banking Authority (EBA) a position paper (AMAFI / 17-54) on the new prudential regime for investment firms. It was responding to a presentation made by EBA at a public hearing in late July at which the authority described 58 recommendations that it was proposing to send to the European Commission. EBA had asked participants to provide feedback before finalising the recommendations.
AMAFI voiced strong support for EBA’s amendments to the version of the regime proposed on 4 November 2016, not least become some of the changes were inspired by AMAFI’s own feedback to the initial document (AMAFI / 17-09). AMAFI also hailed EBA’s determination to forge a broad consensus on the revised prudential regime for investment firms which, within the general framework of the Capital Requirements Regulation (CRR), is better tailored to the peculiarities of European firms. However, AMAFI stressed that the regime should apply to all EU investment firms and that a level playing field with credit institutions had to be maintained.
On 16 June, AMAFI published an update of the AMAFI-FBF guide to systems to prevent market abuse (AMAFI / 17-40), which incorporates the new framework established by the Market Abuse Regulation (MAR). The update, which was led by a specially created group within the association, was the subject of discussions with the AMF. An English version is also available.
On 6 July 2017, AMAFI published an updated version of its MAR implementation Q&A (AMAFI / 17-46). Again available in English, the update contains new questions covering investment recommendations.
Once again this year, AMAFI organised a series of meetings in Washington on behalf of the European Forum of Securities Associations (EFSA). Meetings were held with various US and international financial institutions and authorities, including the US Treasury, Congress, the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the International Monetary Fund (IMF) and the Federal Reserve.
This year’s EFSA delegation included the Association for Financial Markets in Europe (AFME), the Swedish Securities Dealers Association (SSDA), BWF, which speaks for the German brokerage industry, and AMAFI, represented by Pierre de Lauzun and Véronique Donnadieu.
With the new Republican administration in the process of being set up, this trip was an opportunity to clarify some of the factors underpinning developments in the United States, including the possible Dodd-Frank Act review. While Brexit was discussed, its attendant challenges are primarily viewed as European issues that will need to be handled without extraterritorial spillover. Accordingly, considerable attention was paid to the prospect of a potential review of equivalence agreements for central counterparties and the European framework for relations with third countries. Talking partners also spontaneously flagged MiFID II research provisions and their extraterritorial effects as an area of concern, and participants generally reaffirmed their resolve to keep the dialogue going and maintain transatlantic cooperation.
L'AMAFI publie la nouvelle édition de son baromètre de la fiscalité de l'épargne : Etat des lieux 2017 et projections 2018 (AMAFI / 17-65).
Publié aux éditions Revue Banque en partenariat avec l'AMAFI, le livre "MIF 2 : Une nouvelle donne pour l'Europe des marchés financiers" présente les principales dispositions de MIF 2 en mettant en perspective leurs objectifs et leurs conséquences possibles.
MiFID 2 place sous le régime des incitations la perception de services et matériels de recherche, ceci imposant de revoir en profondeur la relation commerciale entre les fournisseurs et leurs clients.
Afin d’aider leurs adhérents respectifs à formaliser les conditions dans lesquelles la recherche pourra être fournie à compter du 3 janvier 2018, l’AFG et l’AMAFI se sont rapprochées afin d’élaborer une Convention-type de fourniture de prestations de recherche.
Cette Convention fournit une base de Place à partir de laquelle les parties peuvent convenir des adaptations qui paraissent nécessaires à leur situation particulière, étant précisé qu’elle a été établie de façon à encadrer les relations entre tout fournisseur de recherche et tout client, quels que soient leur statut et leur situation géographique. Elle s’accompagne d’une note de commentaires visant à apporter des précisions sur son contenu (AMAFI - 17-68).
Given the difficulties faced by members in implementing the obligations on trade confirmations, AMAFI alerted the AMF to the scale of the IT developments required to issue confirmations consistent with MiFID 2 requirements. An additional six months will be needed to complete these developments.
European MiFID Template
This summer, the European Working Group (EWG), which brings together a panel of financial participants in Europe, comprising institutions and industry associations, including AMAFI, finalised its European MiFID Template (EMT), a template for the exchange of information between manufacturers and distributors under MiFID 2. Over Q3 2017, multiple meetings were held to build consensus on completing this template in order to enable a Q&A to be published. AMAFI participated actively in these meetings, where it advocated the views of its members. The EMT has been posted on our website.
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The International Council of Securities Associations (ICSA), which has been chaired by Pierre de Lauzun since May, met the Financial Stability Board (FSB) for a second time in Basel in mid-November. The agenda included monetary policy normalisation, particularly the uncertain impact on fixed income markets, stability issues raised by hedge funds employing leverage, risks of reduced international cooperation and market fragmentation, corporate governance and remuneration as tools to prevent bad behaviour, potential links between location and stability risks, and cybercrime.
The Secretary General and his staff expressed interest in substantive dialogue with the industry and in any contribution that could inform the analysis of potential risks for market stability, such as risks for market liquidity in the event of a shock, for example. The ICSA is resolved to respond to this expectation, especially given the FSB’s capacity to make real headway in financial market reforms.
On 29 September, the European Banking Authority (EBA) sent the European Commission its opinion on a new prudential framework for investment firms (EBA/Op/2017/11). The Commission must now draft a legislative proposal by the end of 2017.
AMAFI, which has been monitoring this issue since November 2016, is currently reviewing EBA’s opinion, which will guide the Commission and its co-legislators in the work ahead. The challenge is to establish a regime that, while being better suited to investment firms’ activities, is consistent with that applicable to credit institutions, where they conduct the same activities. Equally, it is important that the new regime should preserve the possibility of conducting consolidated supervision for groups comprising credit institutions and investment firms.
