At its meeting in Brussels, AFME approved the application of Natixis to join its Board. An AFME member since 2009, Natixis becomes the first new AFME Board member since 2010, joining 21 other leading European wholesale banking groups on AFME’s governing body. Simon Lewis, Chief Executive of AFME, said: “We are delighted to welcome Natixis to the AFME Board. As a strong player in Europe’s capital markets Natixis will bring an added dimension to the Board’s work. We are proud that AFME’s board comprises such a wide cross-section of Europe’s wholesale markets and the appointment of Natixis shows that the role and purpose of AFME as a pan-European trade group is more important than ever. We will be delighted to welcome Luc François, Head of Global Markets, Corporate & Investment Banking, as our new AFME Board member.” Luc François, Head of Global Markets, Corporate & Investment Banking, Natixis, said: “With our headquarters in France and our activities across the continent, Europe is at the heart of Natixis’ businesses. We are committed to supporting strong pan-European capital markets at the service of the continent’s economies. We are delighted to have been approved as a Board member of AFME, which will allow us to further our contribution to the regulatory decision-making process while benefitting more fully from AFME’s extensive wholesale banking expertise.” -ENDS- Notes to EditorsBiography: Luc François began his career in 1986 at IBM before joining Société Générale in 1988 where he held several positions before being appointed Global Head of Equity and Equity Derivatives in 2007. He joined Morgan Stanley in London in 2008 as Head of Equity Derivatives and European Equity. In 2011, he was appointed Global Head of Derivatives. In 2012, Luc François joined Natixis as Head of Global Markets. Luc François is a graduate of Supélec (Ecole Supérieure d’Electricité).

The Global Financial Markets Association (GFMA)and PwC have today published a new report on current trends in technology and innovation and their impact on the investment bank of the future. The report, entitled ‘Technology and Innovation in Global Capital Markets,’ examines the key trends which are expected to impact the industry over the next five years, providing a vision for the future and identifying the implications for the industry and for future policymaking. Kenneth E Bentsen Jr., CEO of the GFMA, said: “Global investment banks are embracing opportunities to enhance the current operating environment, enabling firms to build out systems to meet global regulatory requirements, evolving client expectations and serving clients in jurisdictions they want to do business. In order to take advantage of the opportunities in this developing environment, banks are prioritizing investment in technology and innovation. Policymakers and regulators have a key role to play here by promoting innovation and supporting the adoption of new technologies, whilst ensuring that future regulatory frameworks maintain a level playing field and promote integrity of capital markets and financial stability.” Isabelle Jenkins, Partner at PwC, said “Our report shows that new technologies will drive changes across investment bank functions, their workforce, and industry partnerships. Success will depend on the ability of investment banks to achieve long-term benefits from new technologies by prioritizing investment, looking to collaborate where possible, identifying and developing the skills needed, and building a culture for innovation.” The report was developed through a survey of representative banks regionally at AFME, ASIFMA and SIFMA, to provide a collective view globally of developments impacting capital markets. It was supported by additional research from PwC. Among the key findings from the report are: Technology is one of the most powerful levers banks have to address potential disruption, tackle existing industry challenges and deliver future opportunities. While an average of 90% of survey respondents (regional breakdown: US 90%, Asia 83%, Europe 95%) identified the opportunity for cost reduction as the most important driver for the adoption of new technologies, only 27% on average (US 27%, Asia 30%, Europe 25%) felt that the current investment allocated by banks to this strategic change was sufficient. There are four core technologies - Data & Analytics, Cloud Computing, Artificial Intelligence (AI) and Distributed Ledger Technology (DLT) – which have the potential to transform banks and the industry; A clear data management strategy is an immediate priority as it is the enabler for the four core technologies identified. However, across industry, there are varying levels in the maturity of how data is currently being managed and the approaches to realize its future value; Significant implementation of Distributed Ledger Technology (DLT) remains a longer-term priority based on the current complexity of bringing large-scale enterprise and industry solutions to market, as well as integration with legacy systems, and considerations for data privacy and cybersecurity; An average of 82% of survey respondents (US 75%, Asia 90%, Europe 80%) believed the impact of new technologies on the workforce will lead to business and IT skills merging and future roles becoming more relationship focused. Competition for future skills will be high, requiring banks to both invest in re-skilling the existing workforce and driving cultural change to attract new talent; New technologies will shape investment banks to be increasingly automated, data-led, open and agile and connected into a wider pool of technology and service providers; Banks, policymakers and regulators must keep pace with new technologies to balance the potential risks and cybersecurity concerns they may introduce. Any future regulatory frameworks should be applied with a proportionate and principles-based approach, but at the same time ensure a level-playing field that creates an open, competitive and sustainable market for technology and innovation. Clickhereto download the full report -Ends-

Following the publication of the Commission’s progress report on Capital Markets Union, AFME Chief Executive, Simon Lewis, said: “Today’s progress report highlights the significant steps that have been taken towards achieving Capital Markets Union (CMU) over the last four years, but there is still much further work to be done in order to meet the aims of this vital initiative.” “Although time is short within this current legislative cycle, we believe further progress can still be made in key areas such as the ESAs review over the coming weeks.” “CMU should also be given even greater emphasis in the next Commission, with an ambitious agenda and a vision for the future.Maintaining political momentum at EU member state level will also be essential to tackle long-term barriers and fragmentation, in areas such as insolvency and taxation reform, in order to support economic growth.” – Ends – Notes to editors: In September 2018, AFME published a report tracking the progress to date of the Commission’s Capital Markets Union project through seven key performance indicators identifying what further work needs to be done: https://www.afme.eu/globalassets/downloads/publications/afme-cmu-kpi-report-4.pdf

Following today’s ‘meaningful vote’ on the Withdrawal Agreement in the UK Parliament, Simon Lewis, Chief Executive of AFME, said: “There are now just 17 days remaining until the UK is due to leave the EU and the lack of agreement today means a no-deal scenario continues to be a very real concern.” “Our members will continue to implement their contingency plans in order to minimise disruption in a no-deal Brexit scenario. It is essential that UK, EU and Member States and regulators provide clarity on mitigating remaining no deal risks such as continued servicing of uncleared derivatives, data transfers, and the implications of the trading obligations for shares and derivatives.”

Following the political agreement reached in trilogues on the Investment Firms Review package yesterday, Pablo Portugal, Managing Director of Advocacy, said: “We welcome that the provisional agreement retains the current scope of services covered under the EU third country equivalence regime for investment firms. Removing key services such as dealing on own account and underwriting from the cross-border provision of MiFID services would have severely restricted the EU regime for market participants to access liquidity and services provided from outside the EU.” “The equivalence framework has been significantly amended with the inclusion of provisions allowing the European Commission to apply specific operational conditions to an equivalence decision where the activities performed by third country firms are likely to be of systemic importance. It is important that these and other amendments serve to preserve the integrity of EU markets and the benefits of open, competitive and globally integrated financial markets, and are exercised appropriately.” “We look forward to analysing the details of the agreement in other important areas.”

Following the agreement by the Council of the EU and Parliament yesterday on the Commission’s low carbon benchmarks proposal, AFME fully supports the two-year extension of the transition regime of the Benchmarks Regulation (BMR), for critical and third-country benchmarks until the end of 2021. AFME welcomes the creation of the two new categories of benchmarks and the transparency introduced for their methodologies (which should nevertheless remain proportionate). On critical benchmarks: “The two-year extension is extremely welcome given the sheer number and variety of financial contracts linked to the two main EU critical benchmarks, EURIBOR and EONIA, which means reform will be immensely complex and much still remains to be done.” On third country benchmarks: “Despite their misleading ‘non-critical’ labelling under the BMR, third country benchmarks, such as non-EU Foreign Exchange spot rates, are widely used by EU financial firms and corporates in hedging commercial activities and investments abroad” “Therefore, this delay is extremely welcome news, particularly given that the January 2020 deadline would have been extremely disruptive to EU financial firms and corporates who would have struggled to perform their economic activities abroad if these benchmarks were prohibited. “During the two-year delay, we would very much welcome a revision of the third country regime under the BMR Review to rectify any unintended consequences.” – Ends –

Following today’s ‘meaningful vote’ in the UK Parliament, Simon Lewis, Chief Executive of AFME, said: “Today’s lack of agreement on the Withdrawal Agreement means that the banking and finance industry still does not have certainty on a transition period, which is vital to ensure an orderly withdrawal process in March 2019.With 73 days to go, time is running out and the continued risk of a no-deal scenario is a growing concern.” “As a result, our members are continuing to implement their contingency planning in order to minimise disruption in a no-deal scenario. Given the continued uncertainty, it is vital that action is taken by the UK, EU and Member States to provide clarity on solutions to address cliff edge risks in a no-deal scenario.” – Ends –

Washington, D.C., 11 January 2019 – New Financial, commissioned by the Global Financial Markets Association (GFMA), has today published a new major industry report, “The New Financial Global Capital Markets Growth Index.” The purpose of the reportis to provide an in-depth review and comparison of national and regional capital markets across the globe in terms of market size, depth, and access to pools of capital. GFMA commissioned New Financial to prepare the report to underscore the role markets can play in supporting sustainable economic growth around the world by diversifying the sources of available funding for companies, improving productivity through more efficient capital allocation and better risk management, increasing the capacity of economies to absorb economic shocks, and funding more sustainable pension systems. The report also identifies challenges and provides recommendations for jurisdictions to develop and expand capital markets as a source of funding and investment. Mark Austen, past CEO of GFMA and CEO of the Asia Securities Industry & Financial Markets Association (ASIFMA), commented: “While the economic and financial system in every economy is unique – and capital markets are at vastly different stages of development – our analysis shows there is huge potential for growth in capital markets around the world should the barriers to their development be adequately addressed by policy makers.” Kenneth E. Bentsen, Jr., CEO of GFMA and President and CEO of the U.S.-based Securities Industry and Financial Markets Association (SIFMA), commented: “Our goal is to provide a comprehensive analysis to identify development gaps and growth opportunities, as well as understand how deeper capital markets and enhanced opportunities for institutional and retail investment correlates with capital formation and job creation.” Simon Lewis, CEO of the Association for Financial Markets in Europe (AFME), commented: “Our joint report highlights that capital markets in Europe are currently punching below their weight when compared with the US and Asia. A big factor in this relative underdevelopment is the fragmented nature of the European economy, which reduces liquidity and raises the cost and complexity of investing. In Europe, reforming the capital markets through the Capital Markets Union (CMU) is therefore a key priority. CMU has the potential to change existing projected growth rates and will be even more important in light of the imminent challenges posed by Brexit.” – Ends –

At the quarterly meeting of AFME’s High Yield Board today, it was agreed that an independent associate group, the “European Leveraged Finance Alliance Investor Group” or “ELFA Investor Group”, would be established. ELFA Investor Group members will remain members of the AFME High Yield Division. They will meet independently of AFME, but it is intended that they will actively cooperate in initiatives to develop further the European leveraged finance market. Existing AFME investor members will continue to be able to engage in the High Yield Division. The ELFA Investor Group will represent the buy-side community within the European high yield and leveraged finance market and will help to promote a transparent, efficient, and resilient leveraged finance market in Europe. It will also act as a forum for engagement with other industry professionals, as well as a knowledge platform to further educate the European high yield and leveraged finance investor community. Sabrina Fox, formerly Head of High Yield for Covenant Review, has been appointed to lead the group during its development stage. Sabrina Fox, ELFA Investor Group,said: “The establishment of the ELFA Investor Group marks the next step for the European leveraged finance markets, as it will allow its members to speak with a single voice in order to foster a deeper and more resilient market for the benefit of all market participants.” Gary Simmons, Managing Director of AFME’s High Yield Division, said: “The high yield investor community is an important part of the European high yield industry and we value its contribution to maintaining a healthy and viable market. AFME currently has many important high yield investor members and we are delighted to announce the creation of this independent investor group which will allow all parties to continue making a positive contribution to market growth and efficiency as part of the mission of the AFME High Yield Division.” – Ends –

Following today’s Brexit Communication from the European Commission, Simon Lewis, Chief Executive of AFME said: “We welcome today’s confirmation that the Commission has adopted temporary equivalence decisions for UK CCPs and CSDs. This is a very important step to enable continued access for EEA firms to clearing and settlement services in a no deal Brexit scenario. “While this addresses a significant risk, it is important for further action at EU and national level to mitigate against other risks and put in place cooperation arrangements between the EU and UK regulators. In particular we encourage Member States to clarify their approach to the continued servicing of existing uncleared derivatives contracts in a no deal scenario.” – Ends –