The Association for Financial Markets in Europe (AFME), FIA,the International Capital Market Association (ICMA), the International Swaps and Derivatives Association, Inc. (ISDA) and the International Securities Lending Association (ISLA) have jointly published a statement that can be used to help market participants comply with new requirements under the European Union’s Securities Financing Transaction Regulation (SFTR). The SFTR rules come into force from July 13, 2016, and will affect all existing and future title transfer and security collateral arrangements under a variety of financial agreements. Under the SFTR, all parties that accept collateral are obliged to inform their counterparties of the risks involved in entering a title transfer arrangement or granting a right to reuse collateral under a security arrangement. The SFTR Information Statement is the result of a collaborative effort by AFME, FIA, ICMA, ISDA and ISLA, and has been drawn up to inform market participants of the general risks and consequences that may be involved in consenting to a right of use of collateral provided under a security collateral arrangement or of concluding a title transfer collateral arrangement. Market participants can tailor the statement to suit their own specific circumstances. - ENDS-

Commenting on the FCA’s investment and corporate banking market study interim report and a Discussion Paper on the IPO Process, Simon Lewis, Chief Executive of the Association for Financial Markets in Europe (AFME), said: “We continue to support the FCA's efforts to encourage competition in financial services to the benefit of the consumer and with a view to maintaining liquidity and growth across the single market. We note the proposed measures set out by the FCA and, in particular, we welcome the proposal to consider changes to the IPO process in relation to the publication of independent research. We look forward to participating in the consultation process that will follow the publication of the report.” – Ends –

AFME’s High Yield division has today updated many of its standard forms to help establish good practice for the industry. The documents were updated as part of AFME’s general review of its standard documentation, and following buy- and sell-side discussions among AFME’s High Yield members, in a wider effort to maintain and improve business practices in the European high yield market. Gary Simmons, Managing Director of AFME’s High Yield Division, said: "It is important that the changes made in our standard forms are adopted on an industry-wide basis to promote best practice in the high-yield bond market. A number of stakeholders across the industry gave valuable input during the revision of these documents and we hope they will help address some of the issues brought to our attention regarding structure, disclosure and transparency." Among the revised documents are updated Disclosure Guidelines,which were last revised in December 2011. It is hoped these guidelines will help the market tackle issues such as the use of passwords and other restrictions that are seen to limit access to information about bonds on issuer websites, as well as general disclosure and transparency issues regarding deal terms and structures. Also updated are AFME’s standard forms for the Agreement Among Initial Purchasers (AAIP)– both New York and English Law versions– to reflect market developments since they were last updated (for example, the US JOBS Act and the Bank Recovery and Resolution Directive in Europe). Given that listing practices for non-investment grade debt securities can vary, AFME has also put together new Recommended Listing Practice Guidelinesto encourage industry-wide good practice in that area. AFME has also updated its boiler plate prospectus sections including: Plan of Distribution Transfer Restrictions Notice to Investors Book Entry –Option I, Option II and Option III All of the updated forms can be found on the AFME website. – Ends –

The Investment Association and the Association for Financial Markets in Europe (AFME) have today paved the way for safer and better executed Algorithmic trading on Europe’s financial markets. Algorithmic trading is a key component of an investor’s ability to get the best price and execution for their clients. Therefore, it is vital that there is fair and accurate sharing of information between both sides about how any given algorithm operates - most notably between the investors and their broker/dealers. The industry has come together to proactively create this open framework, ahead of MiFID II, which supports Buy and Sell side in meeting their regulatory obligations. To ensure that there is a consistent methodology of how information is shared between each side of an electronic equity transaction, the Associations have created standardised questionnaires that outline the level of detail investors and broker/dealers will provide each other ahead of an electronic transaction taking place. The framework includes technical standards that a platform should meet in order to automate and facilitate the consistent sharing of information. The Associations are now calling on data vendors and suppliers to put forward their proposals to set up platforms that meet these Criteria. The Associations will not endorse or restrict their members to use any particular vendors’ platform. The framework for the Platform can be viewed here.

Today four leading European trade associations representing investors, issuers and other market participants have come together for the first time to support the new framework for securitisation regulation. The Association for Financial Markets in Europe (AFME), the European Fund and Asset Management Association (EFAMA), the International Capital Market Association (ICMA) and Insurance Europe have issued a joint paper backing efforts by EU policymakers to develop a robust and successful framework for simple, transparent and standardised (STS) securitisation. In line with the Commission’s flagship Capital Markets Union initiative, the associations believe that a new framework for securitisation could play a pivotal role between banks’ financing and capital markets, enabling much-needed non-bank funding alternatives and providing investors with high-quality fixed income securities and attractive yields.In the joint paper, the organisations affirm that securitisation is an important element of well-functioning financial markets and call for securitisation to be treated on a level playing field with other forms of investment. They highlight their shared views on the key points for EU policymakers to consider in their development of the new framework. Commenting: Simon Lewis, Chief Executive of AFME, said: “The development of a high-quality securitisation market in Europe is an integral part of the Capital Markets Union and contributes to the Commission's objectives to revive the real economy through increased financing and prudent risk transfer. For the European securitisation market to be safely and successfully rebuilt, the new framework must be attractive for both issuers and investors whilst operating under a strong but fair and rational regulatory regime. We are delighted to unite with investors and other market participants on this important policy initiative.” Peter De Proft, Director General of EFAMA, commented: “EFAMA is acutely aware of the generational opportunity offered by the Capital Markets Union in restoring economic growth in Europe. The Commission’s securitisation package, as an essential component of a successful CMU, could potentially generate billions in additional funding for the economy and could act as a key driver in encouraging investor participation in European capital markets. This joint initiative of the buy-side and sell-side is testament to the sheer emphasis we believe should be placed on achieving a balanced securitisation framework which will work for our markets, our investors and Europe as a whole.” Martin Scheck, Chief Executive of ICMA, said: “Securitisation represents a crucial asset class for investors and borrowers in Europe. As an association with both buy- and sell-side members we have strongly welcomed efforts to revive securitisation as a key element in financing the drive to restore jobs and growth in Europe. This joint paper underlines our commitment to supporting an appropriately designed framework to achieve this.” Michaela Koller, Director General of Insurance Europe, said: “Insurers must have access to a wide range of assets in order to diversify their portfolios, and this includes a need for high quality securitisations. Steps to identify good securitisations have already been made under Solvency II and the Commission’s proposal is a continuation of this, with some important improvements. However, further improvements are needed, some of which this paper outlines. From an insurer’s perspective, we are calling for a much needed revision of the capital treatment of securitisations under Solvency II.” - ENDS-

AFME has today published new research showing that European insolvency law reform could boost GDP output and create jobs across Europe. Insolvency reform is a key plank of the European Commission’s action plan on Capital Markets Union (CMU).The research, produced in cooperation with Frontier Economics and Weil Gotshal & Manges LLP, shows that improvements in insolvency frameworks across the EU could increase GDP by between €41 and €78 billion (or between 0.3% and 0.55% of EU28 GDP). The research also estimates that total EU employment could increase by between 600,000 and 1.2 million jobs.The report, entitled “Potential economic gains from reforming insolvency law in Europe”, finds that much of the absolute gains from insolvency reform could flow to Italy, Spain and France. Countries such as Greece, Hungary and Romania stand to gain most in relative terms; adding 2% to long-term GDP if they can bring their insolvency regime up to the European average.Simon Lewis, Chief Executive of AFME, said: “Closer convergence of EU insolvency rules would help to build a truly integrated Capital Markets Union, benefiting investors and providing greater flexibility for companies. Our research highlights the scale of the potential economic prize. With the Commission due to propose a legislative initiative on business insolvency later this year, we hope that this report will make a positive contribution to the policy debate.”Currently, national European insolvency laws vary in many respects. These differences can have a range of negative effects on financial markets and the real economy, including: increasing uncertainty among investors; discouraging cross-border investment; discouraging the timely restructuring of viable companies in financial difficulty; and making it harder to address the high levels of non-performing loans (NPLs) in the European banking system – a vital issue for banking union. In its action plan on CMU, the Commission has highlighted that adopting minimum standards for insolvency law across Europe would help to alleviate these negative effects. In this respect, AFME’s report recommends: a Chapter 11-type stay of proceedings to enable quick and effective restructuring. granting super-priority status to new financing to provide working capital to a distressed company; giving creditors stronger rights to propose viable restructuring plans; and requiring national insolvency agencies to publicly report on outcomes. Andrew Wilkinson, Head of European Restructuring at Weil, said: “Europe still faces huge challenges in the aftermath of the global financial crisis. Given the scale of the NPL problem, the fragile recovery and enduring concerns about the resilience of Europe's financial institutions, efficient debt restructuring laws are urgent and important. This difficult issue has been left unaddressed for too long. The EU could reap significant benefits for creditors and debtors across the EU by enhancing the possibility of rescuing viable businesses, lowering borrowing costs, limiting the loss of value caused by insolvency and ensuring that large corporates and SMEs have equal access to the best possible restructuring tools and procedures. The catalysing effect that insolvency law reform could have on stimulating recovery in the EU economy by providing an improved legal framework for banks to tackle NPLs and reallocate capital to prospering businesses underscores the significant macro-economic benefits that could be achieved by Commission-led legislative reform in this area.”Amar Breckenridge, Senior Associate at Frontier Economics, said: “We are pleased to have collaborated on this informative report, the findings of which underscore the important contribution insolvency regulation reform can make to the EU’s broader agenda for competitiveness and growth.”The economic impact of insolvency reform in Europe is a relatively new area of research and the amount of economic evidence that has been collated so far is quite limited. AFME’s study seeks to increase the evidence base by using market data in order to test the impact of the quality of national insolvency frameworks on corporate bond yields.The report also contains an overview of current national insolvency regimes in France, Germany, Italy, Spain, the UK, the Netherlands and Luxembourg, as well as case studies relating to recent cross-border insolvency procedures and recent reforms at national level. Also available in: German French Spanish Italian

Also available in: German French Spanish Italian

AFME has submitted its response to the European Commission’s Call for Evidence on the EU regulatory framework for financial services providing the Commission with clear recommendations for reform that would benefit corporates and investors and strengthen capital markets.Simon Lewis, Chief Executive of AFME, said: “With the majority of the regulatory reform programme now adopted, the Commission is right to start examining the cumulative impact of regulatory reforms on the real economy. This is a key element of the CMU action plan, the Commission's flagship project to ensure capital markets flourish in Europe and deliver jobs and growth.”Viewed in isolation, many of the measures from the regulatory reform agenda were both necessary and have had their intended effects. The regulatory reform programme has substantially strengthened the resilience of the banking sector, improved investor protection, and is significantly reshaping how financial markets operate.AFME’s stand-out recommendations for reform concern the need to: avoid further restrictions on market liquidity by inter alia amending the Central Securities Depositories Regulation (CSDR) and re-evaluating the case for Bank Structural Reform (BSR); make targeted changes to prudential rules (e.g. Capital Requirements Regulation (CRR), Solvency II) which may be restricting financing to the economy; carefully reflect before imposing any new regulatory burdens at Basel level. “We need to make sure Europe's regulatory framework is efficient and fit for purpose. Our response focuses on reforms that will improve banks’ ability to finance the economy and provide much-needed capital market services,” added AFME’s CEO.In addition to the response to the Call for Evidence, AFME has submitted a supplementary evidence note. The note takes stock of the EU regulatory reform programme that has been implemented and the structural changes that the wholesale financial markets have undergone. It also identifies some of the emerging concerns about the cumulative impact of regulation on long-term investment, credit allocation, market liquidity and risk management.The Annex to this Press Release includes the key recommendations from AFME’s response to the Call for Evidence.– Ends –

Washington, 14 January 2016 – The Global Financial Markets Association (GFMA), the Institute of International Finance (IIF) and the International Swaps and Derivatives Association (ISDA) have issued the following statement on the Fundamental Review of the Trading Book (FRTB) framework issued today by the Basel Committee on Banking Supervision (BCBS):“GFMA, IIF and ISDA share the Basel Committee’s goal of ensuring the safety and soundness of the global financial system, which is critical to enhancing investor and consumer confidence, and economic growth. We have remained supportive of BCBS’s work throughout the G20-mandated post-crisis programme and have continued to do so during the Fundamental Review of the Trading Book.“In our preliminary review, we appreciate the technical revisions that have been made to the framework and also commend the BCBS for its commitment to review the rules over time, incorporating outputs from other important regulatory initiatives, such as treatment of sovereigns and simple, transparent and comparable securitizations.“Overall, we are concerned that despite the BCBS’s reiteration not to significantly increase overall capital requirements, trading book capital will increase by 40% under the new rules based on the BCBS’s impact assessment. We worry that the rules may have a negative effect on banks’ capital markets activities and reduce market liquidity.“Further impact assessment needs to be run to assess if the gap between the standard and internal models based capital outcomes is reasonable, considering the BCBS’s future work on standardized floors.“We will be reviewing the rules in depth with our members and look forward to continued discussion with the BCBS to ensure the FRTB meets its original goals.”- ENDS -

Commenting on the publication of today’s EBA guidelines on sound remuneration policies, Michael Lever, Head of Prudential Regulation at AFME, said: “We note the publication today of the EBA’s final guidelines on sound remuneration policies and welcome the fact that the implementation of the guidelines will not take place until 1 January 2017, which will allow firms the necessary time to prepare. Additionally, we welcome the publication of the EBA's Opinion on the application of proportionality and its recommendation that legislative change should be considered in this area. We will work closely with the EBA and the European Commission in the coming months in light of the ongoing review of the CRD IV remuneration provisions to ensure that proportionality is an integral part ofthe rules going forward.” – Ends –