Representing financial market professionals based in France

Brèves

27/11/2020
News

IOSCO Annual Meeting and ICSA meetings, 9-18 November 2020

The annual general meeting of the International Organization of Securities Commissions (IOSCO) was replaced by a series of virtual meetings because of the Covid-19 pandemic.

The International Council of Securities Associations (ICSA) and ICI Global, an international association representing investment funds, organised a number of virtual bilateral meetings between the finance industry and international and European regulators.

Key regulatory topics broached during the meetings included issues relating to the impact of Covid-19 on the functioning of financial markets and especially the resilience of non-bank financial institutions (NBFIs), in the light of recent Financial Stability Board (FSB) reports. Increased FSB/IOSCO collaboration was another major topic of discussion, particularly regarding the current work on NBFIs. The meetings also covered Europe’s regulatory agenda, the Capital Markets Union reboot, the importance of improving supervisory convergence, plus sustainable finance and the challenges of implementing a European taxonomy.

27/11/2020
News

Brexit

Share trading obligation and derivatives trading obligation

In late October ESMA published a statement clarifying the scope of the EU share trading obligation (STO). It said that trading in a third country of shares with an International Securities Identification Number (ISIN) issued by a European Economic Area country would be considered to comply with the MiFIR STO provided the transactions were in the country’s local currency. AMAFI welcomed the clarification, which it had been requesting for several months (AMAFI / 20-55). In early November the UK Financial Conduct Authority also released a statement on the scope of the STO, indicating that it will use its Temporary Transitional Power to allow UK investment firms to continue trading all shares on EU platforms.

On the DTO, ESMA published a statement on 25 November indicating that existing rules will continue to apply as there are no risks to financial stability. ESMA stressed nonetheless that the absence of an equivalency decision for UK venues could pose problems for some European entities, particularly UK-based branches. However, the risk that financial flows could be diverted remains, since US venues are currently the only ones capable of meeting a potential dual UK/European obligation.

Extending AMF certification equivalency

In late October the AMF published a news release announcing that it would extend certification equivalency through to 12 December 2022. Under the framework, professionals demonstrating that they have appropriate qualifications recognised by the UK regulator are granted equivalency with the AMF’s certified examination of basic knowledge.

Originally set up in late 2017, equivalency was initially granted until 12 December 2020 to employees of UK-based investment services providers or their branches who had fulfilled certain duties in Britain and could provide evidence of being appropriately qualified to do so, and who were then appointed to hold specific positions in France as part of a Brexit transfer. With this decision, the AMF responded to calls from AMAFI, which had asked the regulator to consider extending equivalency given the challenges arising from the health crisis and continued uncertainty about Brexit implementation.

27/11/2020
News

AMF contributions – 2021 Finance Bill

Beginning in 2019 reforms to the system of dues paid to the AMF led to a substantial increase in the contributions applicable to some smaller firms. The AMAFI lobbied for the system to be rebalanced, and the 2021 Finance Bill currently being discussed includes several amendments.

The aim is to reduce the flat-rate dues payable by firms providing only investment advice and/or order reception/transmission services. While the amounts are set by decree, not by legislation, the explanatory notes accompanying the bill offer some clarification: the annual flat-rate contribution will decrease from €30,000 to €10,000 for ISPs authorised in France and for third-country branches, while for EU branches it will be cut from €20,000 to €7,500. To offset the resulting reduction in contributions paid to the AMF, adjustments will be made to the base and contribution rate for ISPs that deal on own account, whose capital base will be lowered from €12 billion to €1.5 billion and whose contribution rate, set by decree, will be 0.063 per thousand.

Article 21 also introduces dues for two new sets of participants, namely issuers of initial coin offerings and digital asset service providers. The amount for ICO issuers will be set by decree, while it will be €1,000 for registered DASPs and €5,000 annually for DASPs that apply for approval.

01/10/2020
Events

L’AMAFI et Revue Banque publient un nouvel hors-série intitulé :« Quel rôle pour les actionnaires ?»

Quels sont les différents types d’actionnariat ? Quel est le rôle de l’actionnaire en temps de crise ? Quel engagement actionnarial ? Autant de questions auxquelles l’ouvrage entend apporter des réponses, grâce à la contribution d’une palette d’auteurs français et internationaux.

Accédez au hors-série (lien)

En raison des mesures prises pour lutter contre la propagation du coronavirus, aucun débat public ne pourra exceptionnellement être organisé à l’occasion de la sortie de cette publication début juin.

27/01/2021
Events

Webforum AMAFI-RB - Marchés & Relance, le duo gagnant ?

Vidéo du Webforum du mercredi 27 janvier 2021

28/01/2021
News

Brexit

European Union (EU) on 24 December of last year. They are expected to be covered by equivalence decisions negotiated in the coming months. In the meantime, besides the temporary equivalences granted to UK central counterparties (CCPs) and central securities depositories (CSDs), AMAFI worked on other two other urgent issues in late 2020:

Derivatives Trading Obligation (DTO)

Currently, whether their clients are European or not, the UK branches of European firms are subject to both the EU DTO and the UK DTO. Given that this creates a significant loss of competitiveness, AMAFI teamed up with the French Banking Federation as well as sister associations in Germany (BDB), Italy (ASSOSIM) and Ireland (BPFI) to call on (lien) the European Commission to grant a temporary suspension of Europe's DTO. Although a decision has not been taken yet, with talks still ongoing, Britain's Financial Conduct Authority (FCA) published a statement on 31 December (lien) modifying the UK DTO until 31 March 2021: as a result, firms subject to the DTO will be allowed, when trading on behalf of EU clients, to execute their trades on European venues under certain conditions.

UK pension funds

AMAFI also lobbied for UK pension funds to continue to be covered by the temporary exemption under EMIR. Since the exemption is only for European funds under the policy drawn up by ESMA in 2014, and given the potentially severe impact on competitiveness, AMAFI urged France's securities regulator (AMF) to clarify its proposed interpretation of the policy, which predates the Brexit referendum. The AMF Chairman responded by confirming that the policy should not be applied and told affected French firms to contact the AMF (lien).

01/02/2021
News

Investment firms: new prudential standards

The Regulation (IFR) and Directive (IFD) on the prudential requirements of investment firms published on 4 December 2019 will come into application on 26 June 2021, by which time the directive must be transposed into French law.

The IFR and IFD identify three types of investment firms. Class 1 firms are considered to be systemically important and must have credit institution status, while Class 2 and Class 3 firms will be subject to a new prudential regime based on specific metrics, or K-Factors, for each activity.

AMAFI is working hard alongside the French Treasury and the prudential oversight and resolution authority (ACPR) to draft the transposition legislation and assist members as they implement the new regime. In the case of Class 1 firms, this particularly involves examining the consequences of their status change, while other firms need support to switch from the old framework to the new standards.

01/02/2021
News

SFTR reporting obligation

On 13 July 2020 (cf. Financial Newsletter 41), the first phase of the obligation for investment firms and central counterparties to report securities financing transactions came into effect. Two key phases have taken place since then, with the regime being extended to include management companies in October 2020, while in January 2021, Brexit occurred and the regime was extended to non-financial counterparties.

Although the various phases went ahead successfully on the whole, AMAFI continues to devote considerable attention to this topic through its SFTR Group. The goal now is to improve reporting quality, in conjunction with French and European authorities, the main service providers and the European associations most affected by the regulation, such as the International Capital Markets Association (ICMA) and the International Securities Lenders Association (ISLA). One aim is to improve matching between two reporting parties. Another is to address issues that continue to raise difficulties, such as the question of global legal entity identifiers (LEIs).