Climate indices
Before the summer, the AMF consulted AMAFI on how Climate Transition Benchmark and Paris Alignment Benchmark (CTB / PAB) indices should be treated with regard to the complexity restrictions set out in AMF Position No. 2010-05, where the indices are used as underlying instruments for structured products issued as euro medium-term notes.
While wholeheartedly supporting the AMF’s initiative, AMAFI proposed some wording changes for the draft update of Position No. 2010-05 (AMAFI / 21-55), which were welcomed by AMF staff. The amended position is scheduled to be published before the end of the year.
Mapping sustainable finance
AMAFI published its sustainable finance mapping project in July (AMAFI/21-43). The initiative is intended to support members as they analyse and keep track of sustainable finance-related rules, while providing an overview of European and French legal provisions, as well as of the work currently being done by the various competent authorities.
However, the entry into force of new legislation over the summer, including delegated acts incorporating sustainability factors into the MiFID II framework (Delegated Regulation (EU) 2021/1253 & Delegated Directive (EU) 2021/1269, cf. AMAFI / 21-50 & 21-51), meant that an update was required (AMAFI/21-60). The document will continue to be monitored on a regular basis.
Mardi 12 janvier 2022
On 1 December, the International Council of Securities Associations (ICSA), to which AMAFI belongs, met with Martin Moloney, Secretary General of the International Organization of Securities Commissions (IOSCO). The meeting, which was held virtually because of the health crisis, provided an opportunity to focus on three key concerns for IOSCO, which were discussed at the organisation’s general meeting in November.
In the first place, the participants addressed financial stability challenges, and especially the effectiveness of reforms implemented after the 2008 crisis in responding to the market turmoil of March 2020. Another key concern for IOSCO covered in the meeting was sustainable finance and COP 26's role as a turning point for the financial sector, which is poised to play a central role in the energy transition. The meeting also broached retail-related questions, from the growing influence of social media to the rise of neo-brokers and the need for participants to have sound information to support decision-making. ICSA will hold discussions on these issues in the coming months with a view to contributing to IOSCO's work where possible.
Business competitiveness and attractiveness
For months, AMAFI has been stressing the need to consider the competitiveness of European firms and the attractiveness of the regulatory framework in connection with the reboot of the Capital Markets Union (CMU) initiative and in view of the challenge represented by Brexit for the organisation of EU markets (AMAFI / 21-38). A delegation led by AMAFI Chairman Stéphane Giordano met with Verena Ross, Chair of the European Securities and Markets Authority (ESMA), on 19 January to discuss two central issues in this regard, namely reforming ESMA (AMAFI / 21-41) and the MiFID II/ MiFIR review (AMAFI / 21-31).
Addressing the first point, Ms Ross emphasised the challenges involved in incorporating competitiveness in ESMA’s mandate, underlined the value to ESMA of having powers to issue no-action letters similar to those enjoyed by the SEC and CFTC, and stressed her desire to step up interactions between ESMA and the industry.
Regarding the MiFIR review, she noted ESMA's considerable interest in the creation of a consolidated tape, while highlighting the challenges involved in striking the right balance between transparency and liquidity in the transparency regime for non-equity markets. On the derivatives trading obligation (DTO), she expressed support for the notion that suspension of the DTO for participants from one Member State could be extended to firms in other EU countries provided they meet the same criteria. Regarding the potential banning of inducements, she stressed the wide variety of situations in different Member States, with some authorising inducements and others prohibiting them.
SME Financing – Listing Act
The consultation on the Listing Act launched by the European Commission in late 2021 is intended to make listing on European capital markets more attractive for companies and simpler for small and mid-sized enterprises (SMEs). The idea is to make it easier for companies to access capital markets, while preserving a high level of investor protection. This goal is shared by the CMU initiative.
Among the issues raised, AMAFI feels that it is important to promote liquidity and hence to maintain high investor disclosure standards, promote research, including sponsored research, and preserve liquidity contracts. While it may be that the legislation lacks sufficient subtlety to cater to different issuer sizes or fund-raising amounts, making it more cumbersome for smaller companies, the attractiveness of European markets depends on a whole ecosystem and cannot be reduced solely to a legislation issue.
The consultation includes questions about the prospectus, prevention of market abuse and MiFID. AMAFI is readying its response, which must be submitted by 11 February, via an ad hoc group, in partnership with other industry associations, including groups representing issuers.
In late December, the ACPR published the final version of its revised guidelines on customer identification, ID verification and KYC aspects. The publication was informed by work done by the ACPR's AML/CFT Consultative Commission, of which AMAFI is a member.
The guidelines examine customer identification, ID verification and KYC obligations as well as obligations relating to information and document retention in the context of implementing AML/CFT arrangements. They are based on the legislative and regulatory provisions arising from transposition of Directive (EU) 2015/849 (revised in particular by the Fifth Anti-Laundering Directive) and the Executive Order of 6 January 2021, which reflects, among other things, the legislative amendments resulting from transposition of the directive.
The amendments include annex 10 on market transactions, which was published in March 2021 and to which AMAFI actively contributed. The changes involve ID verification measures and the new obligations relating to beneficial owners, the registry of beneficial owners and trust registries
AMAFI and other industry associations call on the ACPR to continue working on these guidelines, particularly those pertaining to beneficial owners (registry, notification of discrepancies, new obligations) and remote entry into a business relationship, especially in instances where the services of a remote ID verification service provider are employed.
Le 31 janvier dernier, l’AMAFI a eu le plaisir d’accueillir Catherine Balençon, qui nous a rejoint pour prendre la suite de Pauline Laurent. Diplômée d’HEC, Catherine a débuté sa carrière en tant qu’auditrice chez Mazars puis a passé plus de 20 années à l’AMF dans des rôles de supervision et d’expertise, allant du contrôle des établissements à la contribution à l’élaboration de la règlementation relative aux activités de marché et à la protection des investisseurs, y compris au sein des instances européennes de l’ESMA. Nous nous réjouissons de l’arrivée de Catherine qui apporte ses connaissances approfondies des sujets au cœur des préoccupations de la Conformité. Tout au long de ses années au sein de l’AMF, Catherine a partagé avec l’Association le souci de prendre en compte les contraintes des acteurs dans la déclinaison des impératifs de régulation posés par l’Autorité.
L’AMAFI et la FBF publient une Charte de Place sur la couverture synthétique des fonds ESG. Son respect permet aux fonds concernés de communiquer de manière centrale sur leurs caractéristiques extra-financières, sous certaines conditions.
