The Association for Financial Markets in Europe (AFME) welcomes today’s adoption by the European Commission on the EU Sustainability Omnibus package. AFME strongly supports the initiative to streamline the EU sustainable finance regulatory framework, ensuring it focuses on mobilising capital and financing for the transition while minimising regulatory burdens.  This should go hand in hand with measures to create the economic conditions to support investment in companies as they transition, as the Commission aims through the Clean Industrial Deal announced today.   Adam Farkas, AFME CEO commented: “We welcome today’s announcements and are pleased to see the Commission taking forward the recommendations of the Draghi report and proposing to streamline the sustainable finance framework. It is essential that the Council and European Parliament at least maintain the level of ambition of the Commission’s proposals and that the Commission delivers on its commitment to streamline the ESRS. For the proposals to achieve effective burden reduction for businesses, the framework for banks’ sustainability reporting, risk management and associated supervisory expectations needs careful review to ensure consistency of the simplification objective.” Oliver Moullin, Managing Director, Sustainable Finance, commented: “The omnibus provides a vital opportunity to reorientate policy towards measures that are most impactful in mobilising capital for the transition while streamlining regulation which is creating burdens on companies and financial institutions without meaningfully achieving this objective.   Sustainability reporting and due diligence measures can only go so far in driving decarbonisation of the economy. It is crucial that the EU focuses on putting in place the policies and roadmaps for companies to have the information and incentives to adapt their businesses. This will in turn help channel finance towards those needs. The Clean Industrial Deal published alongside the Omnibus today sets out valuable measures to help achieve this.”  AFME’s assessment of the Commission proposal  The European Commission’s proposal is an important step forward in addressing the challenges with the existing framework. We welcome that the Commission has listened to feedback from stakeholders on aspects that are not working or require simplification. In addition to simplification for smaller companies, it is essential to also reduce burdens for larger companies and financial institutions which are core anchors of the economy. Reducing their reporting burdens will also benefit the thousands of SMEs in their value chains and whom they fund. As the proposal will take some time to be adopted and take effect, it is essential to provide clarity to companies currently reporting under CSRD (i.e. the first wave of reporters in 2025) are not required to report under existing CSRD pending the amendments and revised ESRS taking effect.   CSRD: We welcome the commitment to streamline the EU sustainability reporting standards. It is essential to ensure that disclosures are focused on decision-useful information and maximise international alignment. It will also be important to ensure that financial institutions’ reporting and risk management requirements are adjusted to accommodate the changes to non-financial companies’ reporting. It is also essential to improve alignment with the global ISSB standards.   CSDDD: We strongly support the Commission’s proposal which addresses key concerns under the Directive, including removing the review on its potential extension to financial services, enhancing the practical application of due diligence requirements and respect for national liability regimes, and better aligning the provision on climate transition plans with the language of the CSRD. Taxonomy: We welcome the consultation published today seeking to address challenges with taxonomy reporting and the usability of the “Do-No-Significant-Harm” test under the EU Taxonomy Regulation. It is vital to review reporting requirements which are not providing meaningful information yet create significant burdens for banks and their clients, and to improve usability of the taxonomy. We also welcome the proposed postponement of the Trading Book and Fees & Commissions KPIs under banks’ Taxonomy Reporting. Alongside the legislative proposals, it is essential that the European Commission reviews the remainder of the regulatory framework for sustainable finance to ensure a holistic review of competitiveness and simplification, addressing issues such as:  Implications for banks’ disclosures under Pillar 3 ESG disclosures and supervisory risk management requirements  Ensuring the SFDR Review is coordinated with the outcome of the Omnibus  Simplifying the MiFID sustainability preferences regime  Working with the industry to address implementation challenges arising from guidance  AFME’s detailed recommendations ahead of the omnibus proposal are available here. – Ends –

The Association for Financial Markets in Europe (AFME) welcomes the European Central Bank (ECB)’s announcement that it will be moving forward with the implementation of an interoperability solution that makes possible the settlement of DLT-based transactions in central-bank money in the shortest feasible timeframe. AFME supports linking the solution to existing Target infrastructure, as this would ensure the most substantial degree of legal certainty and enables swift implementation and adoption by market participants. In its further work on the interoperability solution, AFME calls on the ECB to also take serious account of other important considerations, in particular the ability of market participants to efficiently manage central bank reserves and avoid liquidity fragmentation. James Kemp, Managing Director and Head of Technology and Operations at AFME, said: “The swift implementation of an interoperability solution will serve as an important enabler to the further scaling of DLT-based capital markets in Europe and is key in supporting Europe’s leadership position in DLT adoption”. In addition to enabling settlement in central bank money, AFME also emphasis the need for the ECB to review its collateral eligibility framework in a way that allows DLT-based securities to serve a collateral in ECB credit operations. Such an inclusion is vital to further unlocking market liquidity and adoption of DLT-based securities. – Ends –

The Association for Financial Markets in Europe (AFME) welcomes yesterday’s announcement that the Joint EU-UK Regulatory Forum discussed key areas of banking and financial markets. It is particularly encouraging to see growing consensus towards a common implementation of a T+1 securities settlement cycle in 2027. AFME also welcomes closer coordination between the EU and the UK on international standards, including in the area of sustainable finance and the recognition of the need to minimise cross-border reporting frictions. The Regulatory Forum can play a critical role in fostering a coordinated approach that minimises fragmentation and addresses shared challenges in the EU and the UK. We look forward to the outcome of the proposed discussions between meetings. Continued dialogue between the EU and the UK can support an efficient, stable, and trusting long-term relationship in the area of financial services. Going forward, AFME hopes that financial services will be a priority at the upcoming EU-UK summit, given its important role in financing growth and supporting the EU and UK’s competitiveness on the global stage. – Ends –

The Association for Financial Markets in Europe (AFME) has today published its inaugural Distributed Ledger Technology (DLT) Capital Market report, analysing the size and growth of the global market in DLT issuance and related secondary market activities. The report, which will be published on a semi-annual basis, aims to bridge a data gap by offering timely insights into the evolution of the global DLT-based capital market activities and provides a comprehensive overview of the primary DLT fixed income market, secondary markets and valuations, repo transactions, as well as an overview of the size of the tokenised fund industry and that of other tokenised asset markets. Key findings: In 2024, €3bn of fixed income instruments were issued globally with the use of DLT, a 260% increase from €848mn issued in 2023, but still sub-scale considering the total size of fixed income markets. Issuers based in Europe and Asia led by issued amount in 2024, originating €1.7bn and €1.1bn, respectively. The issuance in Europe was strongly led by the DLT trials undertaken by the European Central Bank (ECB) and the Swiss National Bank (SNB), accumulating jointly a total of €1.8bn in 2024 (the Central Bank trials included issuance by European and US-based entities). A total of €483mn was issued in the form of green DLT bonds, representing 16% of the global DLT fixed income amount issued in 2024. Julio Suarez, Head of Research at AFME, said: “We are very pleased to add our DLT Capital Market Report to our stable of regular data reports we publish to help support and advance wholesale capital markets in Europe. Although the adoption of DLT in capital markets is currently limited relative to the size of the global market, its recent rapid growth and the emergence of new market participants and product offerings present substantial opportunities for future expansion. “Undoubtedly, the DLT-based issuance of securities will continue to grow over time, and we are pleased to be the first association in Europe to regularly produce data on this growing asset class.” – Ends –

Rising data fees to offset declining trading revenue burden market participants with surging costs London, UK – 04 February 2025– Research by Market Structure Partners (MSP) reveals that European stock exchanges are increasingly turning to market data sales to compensate for adverse market conditions that should have resulted in a downturn in equity market revenues such as declining equity trading volumes, shrinking market share, and a diminishing customer base. This shift has dramatically driven up the cost of equity market data, which is essential for issuers, investors, and market intermediaries to conduct their daily business. The research, commissioned by a coalition of trade and other industry associations, presents a critical analysis of how the equity market data business and fee structures of Europe’s largest exchanges (Deutsche Börse, Euronext, LSEG, Nasdaq Nordics and SIXSwiss Exchange Ltd)have evolved and how it stifles growth and innovation. Niki Beattie, CEO of MSPsaid “This Study shows the ease with which exchanges can rely on market data income to supplement what should otherwise be a natural decline in revenue and suggests that, as a result, market growth has become a secondary objective.European policymakers with competitiveness and innovation agendas should rigorously challenge the current separation of trading and data revenues at all trading venues.” Total equity market revenues consist of trading revenue and market data revenue combined. However, the market data pricing does not appear to align with the trading activity it underpins. Despite these adverse conditions, EU regulatory disclosures from Europe’s largest exchanges show that they appear able to sustain overall equity market revenues by increasing the portion that they generate from market data as trading revenues decrease. For example: Transacted value on Euronext’s equity markets reduced by 17% between 2020 and 2023. However, the total equity market revenue only declined by 0.5%. This is because market data revenues as a proportion of overall revenue increased from 11% to 19%. Transacted value on at Deutsche Börse’s equity markets reduced by 29% between 2020 and 2023. However, equity market revenue only declined 12%. This is because market data revenues as a proportion of overall revenue increased from 21% to 31%. Transacted value on Nasdaq Nordics’ equity markets reduced by 26.9% between 2021 and 2023. However, the total equity market revenue only declined by 8.8%. This is because market data revenues increased from 19% to 23%. LSEG only has to make regulatory disclosures for its EU subsidiary, Turquoise. Trading turnover on Turquoise significantly reduced between 2020 and 2022, some of which can be attributed to its sale of Borsa Italiana in 2021. Nevertheless, during the same period, market data as a percentage of overall equity revenue rose from 10.5% to 27%. These increases in market data revenue have occurred even though there are no specific costs for producing market data and the costs of running a trading platform, such as software, hardware, energy prices and other factors are stable or declining. Additionally, exchanges in the UK and Europe have run the same trading technology for more than a decade and there is no evidence of any significant expenditure in their accounts. Costs for disseminating data across the market are borne by third parties. The research argues that, exchanges have managed to maintain revenues by charging higher prices to fewer participants for more limited data.bThis appears to have been achieved through the introduction of arbitrary and complex fee structures that are based on multiple factors including: user type (broker/agent), competitive status, professional versus retail users, data consumption method (human use on display terminals versus machine use of non-display data), and number of devices that may be able to see the data. Restrictive clauses also limit data use to exchanges' predefined purposes, making it hard for innovators to use data without taking on indeterminate financial risk. As a result, every firm and user has a different cost profile and, if an exchange lowers prices for one set of customers, it may offset the revenue loss by raising prices for other customers. The pricing model has led to extraordinary price increases, particularly as exchanges appear to seek to stem losses that arise that result from their customers’ increasing automation. Most dramatically, under certain conditions, it is now 35 to 97 times more expensive in 2024 for a machine to use data compared to the cost for a human to use the same data for the same activities in 2017. Additionally, according to the research, firms that compete with traditional stock exchanges, either as trading venues or index providers are amongst those that have seen the most dramatic price increases. Competing trading platforms have seen costs rise by up to 481% between 2017 and 2024, while proprietary index creators that compete with exchange owned indices experienced cost rises between 97% and 170% across three exchanges over the same period. Since the introduction of MiFID I in 2007, these exchanges have collectively earned at least £5.67 billion from market data, justifying their pricing as essential for the maintenance of fair and orderly markets but other competing trading venues have managed to become profitable and process similar volumes in a fair and orderly manner without the same reliance on market data revenues. If market data costs were directly correlated to market share, the study finds that exchanges, leveraging their incumbent status, could have generated up to £4.93 billion (€5.83 billion) in surplus revenue from market data fees since 2008. Alternatively, they could be earning up to 7.64 times more than competitors for processing similar volumes and market share. The research raises critical questions about exchanges' role in regulated markets including: whether they are truly serving the equity market community, whether they are investing in equity market development and whether regulation has kept pace with the evolving business models and interests of exchanges where equity markets are now a minority business. Ultimately, the Study argues that market data's value must align directly with trading activity. It calls for regulation to ensure data is treated as a by-product of trading by all trading venues rather than a separate revenue stream. Failing that, legislative intervention should redefine all trading venues’ objectives to ensure they support market growth as their primary objective explicitly. Once the transparency of exchange data fees is improved, it will be easier to understand the pricing of data dissemination imposed by third party data vendors within the value chain. "This study reveals a concerning trend in European equity markets," saidMike Bellaro, CEO of Plato Partnership. "When essential market data becomes disproportionately expensive, it creates barriers to entry and stifles the very innovation that policymakers are trying to encourage. This is particularly relevant as the UK and European Union seek to enhance their market competitiveness." Adam Farkas, CEO of AFME, said: “Accessible market data is a critical component of healthy and well-functioning capital markets. Irrespective of the asset class, data empowers and allows all market participants to make informed decisions when allocating capital which in turn, supports a competitive and growing capital market. We thank Market Structure Partners for undertaking this critical research which shows that the much-needed growth in Europe may be undermined if attention is not paid to these concerning developments”. Thomas Richter, CEOof the German Investment Funds Association,BVI, said: “Asset managersare legally forced to usestockmarketprices, benchmarks, credit ratings, and other datafrom third-party providers.Because of the existing oligopolymarket structures with only a few providers per segment, there is a case for competition law authorities.We call for an EU data vendor act that regulates the commercial behaviour of these entities.Because if we don't, the already considerable cost pressure in thefundindustry will intensify even further – also to the disadvantage of the consumers.” Tanguy van de Werve, Director General of EFAMA, said:“Competitiveness is high on the policy agenda, including boosting the competitiveness of EU capital markets. Addressing the harmful impact of the oligopoly at the heart of market data access would lower trading costs, encourage new market entrants, and promote innovation. EU capital markets are underperforming their global peers, a trend that has only solidified over the last few years. Tackling high market data costs should be an obvious choice for policymakers looking to reinvigorate European capital markets.” Piebe Teeboom, Secretary General of the FIA EPTAsaid, “The MSP report evidences the ongoing increase in the cost of market data over recent years. This adds significant cost to participating in European financial markets, at a time when Europe is focussed on finding ways of boosting growth and competitiveness. In the interests of ensuring Europe remains an attractive destination for capital allocation, we encourage policy-makers and regulators to consider how the report’s findings impact these objectives.” -ENDS-

Today the European Securities and Markets Authorities (ESMA) hosted the T+1 Governance Launch Meeting to present the arrangements for driving the move to the reduction of default settlement cycles to T+1 for EU securities markets. The reduction of the settlement cycle for securities transactions can help reduce counterparty credit risks, improve market efficiency, and address issues arising from the current lack of alignment between the settlement cycles of Europe and other major global markets, which creates costs and inefficiencies for investors, issuers, intermediaries, and market infrastructures. Aware of the benefits and costs that this transition entails, members of the Industry Committee have welcomed the ESMA report, which identified a pathway and also suggested a date for the transition to the T+1 settlement cycle. In line with the recommendations of that report, and in coordination with the public authorities, the industry has established an appropriate governance framework to guide the transition process with the aim of moving to T+1 in a manner and timing also coordinated with the UK and Swiss markets. At the meeting on January 22 organised by ESMA, the independent chair of the T+1 Industry Committee, Giovanni Sabatini, presented the Terms of Reference for the T+1 Industry Committee, the committee's composition, and the organisation of work across the various identified Technical Workstreams, along with an initial draft of the work plan. The principles underpinning the composition of the committee and its activities are representativeness, inclusivity, transparency, consensus-seeking, and efficiency. In this regard, the committee's work may build upon the work already completed by the European industry in the October 2024 report, as well as the ESMA report and the UK recommendations, US Playbook, and upcoming Swiss report, when relevant. The Chair of the Industry Committee, Giovanni Sabatini, commented: “The T+1 project is a collective effort of the financial industry based on good faith and credibility. Establishing a robust, balanced, and inclusive governance framework is key to ensuring broad acceptance and support while avoiding overcomplexity. A coordinated move to T+1 will support the efficiency, liquidity, and competitiveness of EU financial markets. Constructive, transparent, and continuous cooperation with European Authorities will be key to ensuring the success of the project.”

The Association for Financial Markets in Europe (AFME) is pleased to announce the appointment of April Day as Head of Capital Markets. Ms. Day brings a wealth of experience in investment banking and capital markets to her new role. During her 12 years at AFME, she previously served as AFME's Head of Equities, overseeing Equity Capital Markets (ECM), trading, and post-trade activities. Her career includes senior roles at Dresdner Kleinwort and Panmure Gordon as Director of Equity Sales. Ms. Day holds an LLB (Hons) in Business Law and a Legal Practice Certificate from the Oxford Institute of Legal Practice. Ms. Day succeeds Rick Watson, who announced his retirement in July, after 18 years of service with AFME. AFME’s CEO, Adam Farkas, said, “We are delighted to appoint April as our new Head of Capital Markets. Her market insights and deep understanding of the industry make her the ideal candidate for this role. At AFME, we are committed to nurturing and supporting talent, and April’s appointment underscores this focus. April’s leadership and vision will undoubtedly strengthen our efforts to advance Europe’s capital markets and support our members in navigating the challenges and opportunities ahead.” – Ends –

The Association for Financial Markets in Europe (AFME) has today announced that Juan Blasco, Global Head of Institutional Business at BBVA, has been appointed as Chair of the Board. He assumes the role from Thalia Chryssikou who was previously a member of the AFME Board and served as Chair between June 2021 and July 2024. Adam Farkas, AFME Chief Executive, said: “We are delighted to welcome Juan as AFME’s new Chair. Since joining the Board in 2020, Juan has brought invaluable insight and perspective to AFME and its members. His wealth of knowledge and experience from his over 20-year career in financial services equips him to lead the AFME Board as we work to ensure Europe’s capital markets can play its role in allowing Europe to regain its competitive edge and secure long-term economic prosperity.” “I would also like to take this opportunity to thank Thalia for her service and dedication to AFME. Under Thalia’s Chairmanship, AFME continued to advance its reach and reputation as an expert and credible voice for Europe's wholesale financial markets across a broad range of regulatory and capital markets issues. She has been a very energetic and committed Chair; she remains a friend of AFME’s and we wish her well in her future endeavours.” Juan Blasco, said: "I am deeply honoured to assume the role of Chair at AFME and excited to build on its impactful work. As we navigate an evolving global landscape, Europe’s ability to foster efficient and integrated capital markets is key to enhancing global competitiveness. This requires continued collaboration and coordination between the EU and the UK to ensure that companies and investors are empowered to drive sustainable economic growth. I look forward to working closely with our members to advance capital markets that effectively serve businesses, investors, and communities." – Ends –

A consortium of leading trade associations (the “Trade Associations”) welcomes the opportunity to respond to the consultation of the European Commission (“EC”) on the functioning of the EU Securitisation Framework (the “Framework”). The Trade Associations support the efforts of the EC to review and address holistically the different elements of the Framework which hinder market growth. This initiative is a very important and welcome step at a pivotal moment given the important role securitisation can play in contributing to the realisation of the Savings and Investments Union and vibrant European capital markets supporting the growth and competitiveness of the EU economy. The regulatory and prudential challenges lie both on the demand and the supply side and, therefore, no single reform can ever provide an effective solution to the revival of the EU securitisation market. On the contrary, multiple, synchronised and targeted reforms are urgently needed to address the current regulatory impediments. These reforms include: Reform to Solvency II capital calibrations Reform to Article 5 due diligence requirements Adjustments to bank capital calculations for Internal Model and Standard Model banks Adjustments to LCR eligibility criteria and haircuts for securitisation for HQLA purposes Reform to Article 7 disclosure requirements Simplification of STS criteria – Ends –

The Association for Financial Markets in Europe (“AFME”) welcomes the opportunity to respond to the consultation by the European Commission (“EC”) on the functioning of the EU Securitisation Framework (the “Framework”). AFME is supportive of the efforts by the European Commission to consider holistically and review the different factors which are preventing the revival of the securitisation market and, as a result, hindering broader economic growth in the EU. AFME believes that every single segment of the securitisation market can offer valuable contributions to the Savings and Investment Union and the broader CMU objectives. Traditional and synthetic securitisations of mortgages, SME loans, corporate exposures and other asset classes have the potential to finance the real economy on a greater scale. The SRT market has also experienced significant growth in recent years and can further contribute to the deepening of EU capital markets, while private cash securitisations (both ABCP and non-ABCP) can provide important additional lines of credit to businesses across Europe. Given the potential of securitisation to improve the competitiveness of the European economy, AFME believes that the regulatory framework for securitisation needs to evolve to become more proportionate and risk-sensitive. Adam Farkas, CEO of AFME, said: “We are grateful for the opportunity to share our views and recommendations on what is needed to revive the securitisation market in the EU. We welcome the European Commission’s efforts to review the current Securitisation Framework and ensure it is fit for purpose and able to support the broader growth and competitiveness objectives laid out by the new EU Commission.” Shaun Baddeley, Head of Securitisation at AFME, said: “EU leaders have rightly acknowledged the value of securitisation and called for relaunching the European securitisation market, including through regulatory and prudential changes. The lacklustre securitisation market of the past decade can indeed, at least in part, be attributed to regulatory overcorrection, due to which, the EU is currently lacking the ability to deploy this financing technique at scale. More specifically, the combined effect of certain provisions within the EU Securitisation Regulation as well as in the EU Bank and Insurance Prudential Capital Frameworks have disincentivised EU investors and limited the utility of the product as a funding and risk transfer tool.” Following the submission of the AFME response to the EC consultation yesterday and the publication of AFME’s position paper ‘EU Securitisation back on track’ in June, AFME looks forward to continuing its engagement with the European Commission and other stakeholders as discussions evolve and progress. – Ends –