The steady rise in the cost of market data for investment firms is a major concern for AMAFI members. AMAFI’s Board has responded by setting up a working group to examine the reasons behind the increase and make proposals to the competent authorities. Using this framework, AMAFI prepared a response (AMAFI /19-84) to ESMA’s consultation on prices for pre- and post-trade data since MiFID 2 entered into application.
In its feedback, AMAFI pointed out that MiFID 2 measures taken to lower pre- and post-trade transparency data costs (each type of data provided separately, data made available on a reasonable commercial basis, data made freely available after 15 minutes) have not delivered the hoped-for results. Several factors account for this:
Despite this, the revenues generated by most market operators either remain stable or have increased only slightly. The explanation for this puzzling outcome appears to be large-scale rationalisation programmes by market participants to curb overall costs. In addition, the MiFID 2 framework applies only to entities falling within its scope, whereas the value chain in which market data are produced relies not only on trading platforms but also on data vendors outside the MiFID 2 regulatory framework.
The RCB concept has proven hard for the industry and authorities to monitor. AMAFI therefore believes that the priority should be to make transparency requirements more effective. To that end, pricing lists, contracts, audit procedures and definitions need to be simplified, harmonised and made comparable. Trading platforms therefore need to work with their users to develop good practices. ESMA should not be forced to impose harmonising measures unless this approach fails to deliver results within a reasonable timeframe.
The soaring increase in market data costs has attracted attention not only in Europe but also around the world. The International Council of Securities Associations has set up a working group on the topic, in which AMAFI is taking part. And on 7 November ICSA is organising a forum on market data costs, to be hosted by the European Commission (see programme on AMAFI’s website).
Dans un contexte de Brexit et alors que la Commission européenne se renouvelle, l’intégration européenne des marchés de capitaux s’impose parmi les priorités. Sont en particulier en jeu le financement de la croissance, de l’innovation ou l’accès au marché pour les entreprises.
Quelle stratégie financière adopter dans une Europe à 27 ? Quelles réglementations, quelle supervision, quelles infrastructures permettront de relancer efficacement une Union des marchés de capitaux ?
A la suite de l’entrée en vigueur du Règlement Prospectus en juillet 2019 et des textes français (ordonnance et décret) réformant le régime des offres au public en octobre 2019, les modifications subséquentes du Règlement Général de l’AMF ont été homologuées par arrêté du 7 novembre 2019 publié au Journal Officiel du 21 novembre 2019.
L’AMAFI s’est largement impliquée dans le cadre de la consultation publique ouverte par l’AMF. Parmi ses points d’attention, trois ont notamment été retenus par l’AMF :
Once again this year, AMAFI organised a series of meetings in Washington on behalf of the European Forum of Securities Associations (EFSA). Talks were held with a number of US financial institutions and authorities, including the US Treasury, the Federal Reserve, Congress, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
This year’s EFSA delegation included the Swedish Securities Dealers Association, BWF, which speaks for the German brokerage industry, and AMAFI, represented by Emmanuel de Fournoux and Arnaud Eard. This initiative is a way to maintain transatlantic dialogue, which our talking partners value.
With the US presidential primaries a few months away, the trip provided an opportunity to gauge the negative impact of impeachment proceedings against President Donald Trump, which have considerably slowed legislative work in Congress. The talks were also a chance to gain a clearer insight into US approaches on Dodd-Frank Act recalibration, sustainable finance and digital assets.
As part of discussions on the introduction of provisions to support the development of security tokens at domestic and European level, AMAFI’s Digital Assets Group examined a number of possible ways forward, which were summarised in a document (AMAFI / 19-105) sent to the AMF in late October. The goal, in AMAFI’s view, is to successfully implement an appropriate regulatory framework that protects investors without stifling technological innovation and its potential contributions.
With this in mind, AMAFI is recommending two parallel and complementary approaches.
At domestic level, conduct short-term (one-year) initiatives to build initial expertise in unlisted securities making sure, in view of their experimental nature, that these activities are not captured by standard financial regulations, which are too unwieldy and complex for the purpose. The aim would be to conduct trials that go beyond just security token issuance, which has already been done by Forge Capital and Santander, notably with a view to trading securities on a secondary market.
At European level, efforts should encompass the medium term (between two and five years) and the long term (between five and ten years). To enable experimentation, observation and analysis of practices related to the specificities of security tokens, consideration should be given to the construction of a specific regime, limited in time, by which national authorities could grant exemptions from certain regulatory obligations, linked to the traditional financial instruments scope, non-compatible or unnecessary when applied to blockchain technology, to projects that do not present systemic risks.
Taj - Société d’avocats et l’AMAFI organisent la 10ème édition de leur conférence de début d’année sur l’actualité fiscale pour le secteur financier :
Mardi 14 janvier 2020 de 9h à 11h
Petit déjeuner à partir de 8h30
Automobile Club de France
6 place de la Concorde
75008 Paris : Métro Concorde
AMAFI is updating its guide to implementing product governance obligations. The proposed changes seek, among other things, to clarify the relationship between the obligations to regularly review target markets and to identify events affecting the risk/reward tradeoff. Another goal is to introduce, on an optional basis at this stage, recognition of customer environmental, social and governance preferences, where applicable.
AMAFI is also using the opportunity presented by the update to provide clarification about the framework’s application at the moment of the purchase – not the sale – of financial instruments and about the terminology used in Annex 5 on derivatives. As with previous versions of the guide, AMAFI sent its proposals to the French regulator to provide a basis for bilateral discussions before publishing the document.
Article 5 of MiFIR introduces a volume capping mechanism for trading in equities and equity-like instruments that applies at the level of the individual venue and at EU level. If thresholds are exceeded, trading in the affected instruments is suspended at both levels. AMAFI carried out a study (AMAFI 19-103) to assess how the volume cap mechanism is affecting market microstructure, a year on from its introduction. The study looked at lit order books, considering the change in spreads and interest at the best limit. It also examined the market impact of orders.
The findings revealed a small positive impact on lit order books but this was surely because, among other things, the study period featured low volatility. The volume cap mechanism does not appear to have had a significant effect on the market impact of orders. The results thus appear marginal as regards the effect on market microstructure, even though the industry has had to make significant adjustment efforts in order to implement this provision.
