The Association for Financial Markets in Europe (AFME) today published roadmaps for “Scaling Capital Markets based on Distributed Ledger Technology (DLT)” focused on European Sovereign, Supranational and Public Agency (SSA) bond issuers and EU and UK policymakers and regulators. The last years have seen significant acceleration in the development of DLT-based capital markets, with an uptake in DLT-based bond issuances by SSA issuers, as well as increasing evidence of demonstrated liquidity and benefits throughout the security lifecycle. The global issuance of DLT-based SSA bonds for 2024 has already exceeded 1bn USD, more than any other previous year. International and European SSA and government bond issuers have led this charge, and the market ecosystem is growing with a growing number of banks, investors, issuers, and other market participants adopting DLT. The origination and distribution processes for DLT-based issuances do not differ in any significant way from those for traditional issuances, as underlying economic risks of issues are the same. However, the use of DLT can offer transformative and tangible benefits compared to traditional infrastructures. These include innovation in capital markets through the possibility of programmable settlement, more cost-effective management of issuances through the automation of work flows and corporate actions, as well as reduction of single-point-of-failure risk in financial market infrastructures. Ultimately, these benefits can reduce costs for investors and improve the efficiency and resilience of European capital markets, and even enhance liquidity. In this context, AFME encourages European SSA issuers to consider the opportunities of leading and shaping the capital market transformation towards DLT. In parallel, policymakers play an equally important role in ensuring that the regulatory framework fully supports the deployment of DLT where appropriate in the financial sector by reviewing current obstacles across the security lifecycle and supporting digital cash solutions. AFME’s new reports include: Scaling DLT-based SSA and Government Bond Markets – A Roadmap Strategy for European issuers [link]: This roadmap lays out a phased strategy for issuers to initiate and scale DLT-based SSA and government bond issues. It sets out how DLT can help SSA issuers achieve their mandates and objectives and provides recommendations on concrete steps available to issuers addressing experimentation, scaling, and market maturity. Scaling DLT-based Capital Markets – A Policy Roadmap for the EU [link] and UK [link]: This 8-point plan focuses on specific policy and regulatory changes that are necessary to enable the development and growth of DLT-based capital markets by SSA and corporate issuers, with a focus on 1) updating the sandbox regimes in line with market momentum and 2) introducing a definitive permanent framework for DLT-based securities to maximise their economic functions, attractiveness to investors and technological benefits. Commenting on scaling DLT-based capital markets and an enabling policy framework, James Kemp, Managing Director, Global FX Division, says: “The EU and UK both have a unique opportunity to further develop a permanent policy framework that supports the development of DLT-based capital markets and to shape DLT-based market practices and regulatory standards globally, for the benefit of issuers and investors alike.” Victoria Webster, Managing Director, Fixed Income, says: “Public-sector issuers of debt instruments in Europe - sovereign, supranational and agency issuers – can play a key role in the process of scaling DLT-based capital markets through increasingly deploying DLT solutions in their issues.” – Ends –

The Association for Financial Markets in Europe (AFME) today published a report titled “Digital Finance in the EU – Priorities for fostering resilient, innovative and competitive financial markets”, presenting its recommendations for supporting the development of capital markets and increased access to finance for the real economy through new technologies. The report focuses on the following main areas: Unlocking the benefits of tokenisation and DLT technologies in capital markets: AFME highlights how the development of Distributed Ledger Technology (“DLT”) holds promise for unlocking efficiencies and driving growth. Payments, settlement, and securities lifecycle events may be carried out with greater safety and more efficiency; access to capital markets, through tokenised securities/assets, may be expanded to a broader set of participants. At scale, these developments would benefit the real economy. Supporting an effective data ecosystem: The EU’s proposed Financial Data Access (FiDA) framework, if designed correctly, has the potential to enhance the way banks operate, encourage innovation (including across sectors, if some provisions are met) and support a more effective and efficient data ecosystem. However, a clearer definition of the scope, stronger safeguards to ensure a level playing field and a gradual implementation are key preconditions for a workable framework. Promoting a secure and resilient EU digital finance sector: Work to ensure a successful and proportionate implementation of DORA will remain central in the coming months. Leveraging the opportunities from the use of artificial intelligence (AI): AI has the potential to transform financial services and capital markets, to make them safer, more efficient, accessible, and better tailored to consumer needs. At the same time, these opportunities require careful consideration of new risks and challenges introduced by a growing use of AI. Commenting on the report, Stefano Mazzocchi, Managing Director, Advocacy at AFME, said: “Banks have been at the centre of a profound digital transformation, a process which will continue and accelerate in the coming years. As the EU begins a new policy cycle, digitalisation of finance has the potential to support the development of capital markets. By increasing efficiency, lowering costs, boosting transparency and availability of information and allowing greater access to data, digital technologies can support the CMU project and allow greater access to capital markets both for entrepreneurs and institutions looking for funding, and generate returns for investors. With its digital finance strategy, the EU has been an early mover in this area and we look forward to continuing engagement and dialogue with all stakeholders to facilitate digital innovation”. -Ends-

The Association for Financial Markets in Europe (AFME) welcomes yesterday’s adoption by the European Commission of the Delegated Act to delay the implementation of the EU’s market risk framework by one year to 1 January 2026. AFME supports the EU Commission’s decision given the need for further clarity on both substance and timing, and the need for international alignment. Caroline Liesegang, Managing Director, Head of Capital & Risk Management, Sustainable Finance and Research at the Association for Financial Markets in Europe (AFME) said: “Delaying the implementation of the market risk framework (FRTB) was a necessary decision in light of the ongoing lack of clarity on both content and timeline in other major jurisdictions. It is important to avoid unnecessary regulatory fragmentation when possible. Today’s decision underlines that the European Commission firmly supports international alignment. “AFME also commends the European Commission’s complementary Q&A as it takes into consideration and clarifies the implications a delayed implementation would have on other elements of the EU’s banking regulatory framework (e.g. CRR3 reporting and disclosure requirements and the calculation of the Output Floor). These elements are intrinsically linked to the market risk framework and could create significant challenges for banks if not addressed accordingly. “However, further work remains to be done. It is crucial that the EU’s implementation of the Trading Book/Banking Book boundary (TB/BB boundary) is consistent with the timeline invoked by the delegated act to delay both the FRTB Standardised Approach (SA) and the FRTB Internal Model Approach (IMA) capital calculations and therefore, we welcome the guidance issued to the European Banking Authority (EBA) to instruct supervisors to delay the implementation of the TB/BB boundary as they have done previously. We are, however, disappointed in the Commission’s conclusion not to address the credit valuations adjustment framework (CVA) and the profit and loss attribution test (PLAT). In our view, given the interdependence of the various regulatory frameworks, an aligned timeframe of implementation and transition is important to avoid operational inconsistencies. We look forward to a continuing dialogue with the Commission and the EBA as these issues evolve and as the broader international picture becomes clearer.” – Ends –

The Association for Financial Markets in Europe (AFME) today published a paper titled ‘Priorities for UK Financial Markets’, which outlines AFME’s vision for the UK’s capital markets, focussing on three key elements: the overarching principles for better financial regulation; tackling current issues; and revising the relationship between the UK and the EU. AFME welcomes the new Government’s commitment to UK capital markets and supports the view that the UK can only achieve significant economic growth with well-functioning, deep and liquid capital markets. AFME outlines principles that will help create markets that serve the needs of companies and investors alike, and also explores the specific challenges and opportunities that lie ahead, including the implications of recent regulatory developments. Finally, AFME considers a key ambition of the government: revising and shaping the relationship between the UK and EU. AFME and its Members take a substantial interest in the future relationship between the UK and EU, wishing to see both markets develop in tandem and address collaboratively the global issues that both jurisdictions face. AFME would like to see the new Government continue to build on the UK-EU Financial Services memorandum of understanding (MoU). AFME and its members await the first Budget of the new Government, and in its paper, AFME outlines how a stable and favourable tax and investment environment in the UK can help both the financial sector and the wider economy. The new Government should focus on encouraging long-term investments for the net-zero transition and consider removing the Stamp Duty Reserve Tax (SDRT) to promote capital market investment. In conjunction with its policy paper on Priorities for UK Financial Markets, AFME will also publish an accompanying paper outlining its priorities for sustainable finance given the emphasis that the new government has placed on the transition to net-zero. Commenting on priorities for the UK Government, AFME’s CEO, Adam Farkas, said, “The Government should aim to ensure that the regulatory framework for financial services is clear, keeps business compliance costs proportionate, and ensures high standards across UK markets. AFME and its members would welcome, under the new Government, a clear focus on some of our main policy areas including, a rethink on the proposed FCA guide to enforcement, the recognition that the financial sector’s ability to support the transition will depend largely on whether the conditions are in place to enable the real economy to transition, a stable and favourable tax environment, a commitment to developing DLT based securities and a joined-up approach to accelerated settlement with the EU and Switzerland. We would also welcome a renewed conversation around securitisation to unlock lending to SMEs and to help finance the transition to net zero.” – Ends –

The Association for Financial Markets in Europe (AFME) congratulates MEP Lalucq, the incoming Chair and newly elected Vice-Chairs, of the European Parliament’s Committee on Economic and Monetary Affairs (ECON Committee) and looks forward to constructively engage with all ECON members over the coming legislative term. As Members of the European Parliament begin the exercise of their mandate, AFME is pleased to publish its report titled ‘Scaling up and integrating EU capital markets’, outlining its vision and recommendations on the future of EU capital markets, an issue which is likely to be a central concern for the ECON Committee. In the report, AFME calls for a revigorated CMU which can be achieved by focussing on: (i) increasing market liquidity, (ii) relaunching the EU securitisation market and (iii) modernising the regulatory and supervisory ecosystem. Reflecting on the current state of EU capital markets, AFME’s CEO, Adam Farkas, said: ‘After a decade which has seen multiple initiatives put forward under two iterations of Capital Markets Union Action Plans, the role and capacity of the EU’s capital markets has unfortunately not changed substantially. An integrated and liquid European capital market is an essential element of the EU’s future competitiveness on a global stage. The goal for the next mandate should therefore be to deliver on a scaled up, seamless single market for capital and banking.’ Commenting further on the report, Remi Kireche, Director, Advocacy at AFME, said: ‘the absence of a truly integrated, scaled-up EU capital market not only undermines the EU’s economic competitiveness, but it is also necessary to channel investment into the EU’s green and digital transitions, for the EU to strengthen its economic security by investing in strategic sectors, and to allow citizens the opportunity to benefit from productive investments for their savings and retirement. We strongly support the fresh political momentum to advance CMU and encourage the Commission and the co-legislators to define and agree on a set of transformative measures as the time has come to deliver changes in practice.’ – Ends –

The Association for Financial Markets in Europe (AFME) would like to extend its congratulations to Rachel Reeves, Darren Jones, Lord Livermore, Tulip Siddiq, Emma Reynolds, James Murray and Nick Thomas-Symonds on their appointments as Chancellor of the Exchequer, Chief Secretary to the Treasury, Financial Secretary to the Treasury, Economic Secretary to the Treasury and City Minister, Parliamentary Secretary to the Treasury, Exchequer Secretary to the Treasury, and Minister for the Constitution and European Relations. AFME welcomes the new Government’s commitment to UK capital markets and supports the view that the UK can only achieve significant economic growth with well-functioning, deep and liquid capital markets. AFME’s priority reforms seek to maximise the contribution our capital markets can make to the government’s ambitions on economic growth and addressing some of the major challenges that the UK will face in the coming years. We outline key principles that will help create deep, integrated, and sustainable markets that serve the needs of companies and investors alike.AFME supports ongoing policy development based on regular dialogue and consultation between policymakers and industry, providing the clarity, certainty, and predictability that international businesses and investors need. A focus on international competitiveness: AFME continues to support the competitiveness objective for financial services regulators in the Financial Services Market Act to boost international competitiveness and economic growth. Competitiveness does not come from low regulation, but from a well-functioning financial services ecosystem. Given the importance of the objective it is important that the regulators can demonstrate how they are meeting it through the policy decisions they are undertaking. Maintaining regulatory independence and agility: Regulators should continue to be independent within the mandates given to them and have powers to react to market developments in a timely manner wherever justified. Good regulation should be tailored to the UK market, support the industry’s ability to compete internationally, and evolve to meet changing needs and international standards. The UK’s reputation and success as a global financial centre depends on high standards of regulation, and a stable and independent regulatory regime. A clear roadmap on capital market reforms: AFME members would value the development of a structured timetable for the completion of the work under the smarter regulatory framework, noting positive developments with the recent publication of the Regulatory Initiatives Grid and the approach to splitting the repeal of retained EU law within the FSM Bill into tranches. Commenting on the appointments, AFME’s CEO, Adam Farkas, said, “On behalf of our members, I want to extend our sincerest congratulations to the above-named ministers on their appointments. We look forward to working with them and their colleagues to secure the UK’s long-term economic prosperity and competitive advantage. We strongly believe that UK regulation should keep-pace with global changes in regulation, to ensure the UK does not diverge from other major overseas jurisdictions, or international standards and best practice. Changes to the regulatory landscape should be considered alongside the effect that they will have on the UK’s competitiveness compared to other jurisdictions. A consistent international level playing field and the prevention of both excessive regulation and the fragmentation of capital across different jurisdictions are vital to cross-border banks and their client base who benefit from open, liquid and transparent global financial markets”. -ENDS-

A cross-industry group made of up the Investment Association (IA), the Association for Financial Markets in Europe (AFME), the Alternative Investment Management Association (AIMA) and UK Finance commented: “The establishment of a UK consolidated tape for equities and Exchange Traded Funds (ETFs) would be a major step in enhancing the competitiveness, transparency and resilience of UK capital markets. We strongly support the FCA’s ongoing work to develop the tape and its goal of strengthening the UK’s position in global wholesale markets. “The ‘sell-side’ and ‘buy-side’ are aligned in their views regarding the scope and features of the tape for equities and ETFs. Namely, we urge the regulator to require the inclusion of both pre-trade and post-trade data from launch. Including real-time pre-trade data will be crucial for the tape’s commercial viability and long-term success - it would, for example, attract the widest user base and promote retail market participation. In particular, we believe the tape should include, from the outset, five layers of best bids and offers and venue attribution. This would offer market participants and regulators a complete view of market liquidity. Ultimately, it has the potential to boost trade in UK markets. “We understand that the FCA is due to provide an update on its work by the end of this year. We would welcome an acceleration in the timeline to create a UK consolidated tape for equities and ETFs and look forward to working with the FCA on the design and the development of a tape that is comprehensive, meaningful and delivers optimal outcomes.” For further information, please contact: Helen Ayres, Head of Communications:[email protected] T: +44 (0)20 7269 4620 Ellen Hodgetts, Communications Manager:[email protected] T: +44 7548841289 Ismail Abdi, Communications Executive:[email protected] T: +44 7596 872575 IA Press Office:[email protected] Notes: AFME (Association for Financial Markets in Europe) promotes fair, orderly, and efficient European wholesale capital markets and provides leadership in advancing the interests of all market participants. AFME represents a broad array of European and global participants in the wholesale financial markets. Its members comprise pan-EU and global banks as well as key regional banks, brokers, law firms, investors and other financial market participants. AFME participates in a global alliance with the Securities Industry and Financial Markets Association (SIFMA) in the US, and the Asia Securities Industry and Financial Markets Association (ASIFMA) through the GFMA (Global Financial Markets Association). For more information please visit the AFME website: www.afme.eu Follow us on Twitter @AFME_EU

The Association for Financial Markets in Europe (AFME) welcomes the Financial Conduct Authority (FCA)’s final rules for a new, simplified and more competitive listing regime, aiming to boost growth and innovation on UK stock markets. Commenting on the publication of the final rules, Gary Simmons, Managing Director of Equity Capital Markets at the Association for Financial Markets in Europe (AFME), said: “The final rules in Policy Statement 24/5 set out a simplified listings regime with a single category and streamlined eligibility for those companies seeking to list their shares in the UK. We applaud the FCA on a bold overhaul of the current listing regime, which we believe, is a significant step towards increasing the attractiveness of the UK capital market and aligning the regime with international market standards. The new regime features a more flexible, disclosure-based approach, representing a move towards economic growth and accommodating increased risk appetite within the market. The rules retain the sponsor role, but outline a recalibrated declaration requirement and will play an important role alongside the forthcoming changes to the public offers and admissions to trading regime this summer. “We thank the FCA for the continued engagement over the past three years and we look forward to further engagement with the FCA as this develops.” – Ends –

The Association for Financial Markets in Europe (AFME) is pleased to announce that Caroline Liesegang, Managing Director, Head of Capital & Risk Management, Sustainable Finance and Research, has been appointed to the European Banking Authority (EBA)’s Banking Stakeholder Group (BSG). The BSG is composed of 30 members and focuses on examining specific technical issues related to its work plan and formulating opinions to be sent to the EBA on key areas of relevance. In particular, the BSG will be consulted on actions concerning regulatory technical standards, implementing technical standards, guidelines, and recommendations. Ms. Liesegang brings a wealth of experience in micro- and macroprudential analysis and research to the BSG. As AFME’s Head of Capital & Risk Management, Sustainable Finance, and Research, she leads the Association’s efforts on the capital framework for banks. Prior to joining AFME, Caroline served as the UK Chief Risk Officer of Commerzbank London, where she designed and implemented the local risk governance framework and oversaw risk management for Commerzbank’s UK entities. Prior to Commerzbank, Caroline worked for the ECB, EBA and Deutsche Bundesbank. Adam Farkas, Chief Executive of AFME, said: “AFME is thrilled that Caroline has been appointed to the BSG. Given Caroline’s extensive experience, she is well-equipped to offer advice on any issues related to the BSG tasks and will provide valuable input on common supervisory culture, peer reviews of competent authorities, and assessment of market developments.” – Ends –

The Association for Financial Markets in Europe (AFME) welcomes the recent adoption of the European Council’s Strategic Agenda for the next institutional cycle (2024-2029) as part of its conclusions. Commenting on the conclusions reached, AFME’s CEO, Adam Farkas, said, ‘the adoption of the Strategic Agenda by EU leaders stresses the vital role of capital markets and banking union to unlock the necessary investment to ensure a more dynamic and competitive European economy. Strong and integrated capital and banking markets have an essential contribution to make in financing innovation, providing the investments needed for the green and digital transitions, and supporting the competitiveness of European companies. We look forward to seeing how the new European Commission will action this agenda in practice and recommend it focuses on a few bold initiatives which can have a transformative impact, such as streamlining the EU trading and post-trading landscapes, as well as ensuring securitisation can play a more effective role in bridging bank and market-based finance. In this context, AFME also welcomes the ongoing discussions in the Council to follow up on the Eurogroup’s CMU recommendations of earlier this year. It is encouraging to see that Member States continue to actively and regularly engage on critical issues for the CMU such as unlocking retail savings. While the exchange of best practices among Member States to grow and deepen national capital markets should be pursued, the EU dimension should continue being an important part of the different Council’s workstreams as the efficiency of capital markets in a global context requires the scale that only an integrated EU market can deliver.’ – Ends –