The General Data Protection Regulation (GDPR) lays down rules for the protection of individuals with regard to the processing and free flow of personal data. The impending departure of the UK from the EU creates significant uncertainty as to the ability of businesses, including banks and investment firms, to continue to transfer personal data between the EEA and the UK post-Brexit. This briefing note is available in English, French,German, Italian and Spanish. This briefing note outlines: The relevant requirements under GDPR for the processing of data and the mechanisms for transferring data between the EEA and third countries; The uncertainty in relation to firms’ ability to transfer personal data between the EEA and UK postBrexit; The importance of personal data sharing in providing an efficient and secure service to corporate and institutional clients; and AFME’s proposed solution - that the European Commission (EC) and the UK should, as a matter of priority:- Start discussions in preparation for Adequacy Decisions without delay; and- Commit to a transitional solution while adequacy assessments are undertaken.

AFME has established an Artificial Intelligence (AI) Task Force with the objectives of increasing awareness of AI in capital markets and supporting the development of future policy. These objectives are intended to enable the continued successful adoption and utilisation of this technological capability for the industry. This first paper by the AI Task Force: • Explores capital markets use-cases and benefits of AI; • Identifies areas where AI may impact the risks faced by financial institutions and proposes control principles for managing those risks; and • Suggests considerations for future policy.

Executive summary has been translated intoFrench, German, Italian and Spanish. AFME has today publisheda new study,Impact of Regulation on Banks’ Capital Markets Activities: Anex-postassessment, which was produced in collaboration with PwC. While there have been many forward-looking studies examining how banks may respond toregulatory reforms, this study is the first that examines how banks haveactuallyresponded to regulations 10 years on from the global financial crisis. The study draws upon data across a selection of 13 global banks - which in aggregate represent 70% of global capital markets activities - covering three years of data: 2005, 2010 and 2016 as the latest full year of data available. Key findings include: The aggregate annual regulatory cost that applies to capital markets activities across the 13 banks in our sample is estimated to be approximately US$37bn, representing 39% of total capital markets expenses in 2016. Capital and leverage requirements are the most substantial drivers of regulatory cost and account for almost 90% of the total regulatory impacts. Regulation drove a 14 percentage point reduction in (pre-tax) capital markets return on equity (ROE) from 2010 to 2016 (from 17% to 3%) before banks’ mitigating actions via deleveraging, cost reductions or repricing. Following such actions, overall ROE (excluding one-off charges) recovered to 11% by 2016. Rates and credit activities have been most impacted by regulation in ROE terms. Higher regulatory costs and low returns have been significant drivers of assets deleveraging in banks’ capital markets activities. Regulation alone accounted for about two thirds of the net 39% decline in capital markets assets across the sample of banks between 2010 and 2016, with pronounced falls in rates, credit, commodities and equities assets. Macroeconomic trends and non-regulatory factors also explain some of the movement in assets. Broad trends of deleveraging across regions suggests these are global in nature, and not limited to individual firms or regions. Read press release

AFME has published a new report, “Industry Utilities: A perspective for Capital Markets”, setting out potential future opportunities for utilities use across the capital markets, as well as the challenges preventing utilities from coming to market. The report lays out best practice principles for developing utilities for the industry, providing guidance for market participants, as well as supervisors and regulators. The report highlights that ‘utilities for capital markets’ are a way for all participants - from financial firms to supervisors - to pool resources and capabilities and to collaborate in order to achieve benefits of efficiency, scale and cost saving. Read press release here.

The FAQs are available inEnglish,French,German,ItalianandSpanish. AFME has published a guide “How might wholesale financial services contracts be impacted by Brexit?: FAQs for Clients”. This guide, published in conjunction with Clifford Chance, is part of our ongoing work to provide insight on issues arising out of the UK’s withdrawal from the EU. These Frequently Asked Questions (FAQs) are intended to assist clients of banks in understanding how their cross-border contractual relationships could be impacted by banks’ plans to adapt to Brexit, but may also be of broader interest to market participants, regulators and policymakers. Issues covered include which clients may be in scope, how different types of contract may be affected, and consequential operational impacts that need to be considered.

AFME’s High Yield Division has published its most comprehensive set of industry-wide Guidelines for the European High Yield Primary Bond Market

The Roadmap collates and summarises existing analysis made publicly available by the FSB, IOSCO, RFR Working Groups and other sources identified by the Trade Associations and provides a single point of reference for market participants seeking a highlevel overview of the global initiatives undertaken to date. It does not include unpublished information on the significant work already underway by the RFR Working Groups to address many of the challenges that are described in the Roadmap, but it does provide contact details for those groups, where available.

Non-performing loans (NPL) remain an issue thatsome EU Member States continue to deal with. As part of the CMU mid-term review, the European Commission (EC) will assess the case for the development of the secondary market of NPLs.

Available in... French German Spanish AFME has published a short paper highlighting some of the potential cliff edge risks that Brexit could create for market efficiency and financial stability. The Brexit process is presenting businesses, investors and banks with unprecedented challenges. The time pressure on firms to prepare themselves and their clients for the UK’s exit from the EU is increasing. However, it remains unclear what kind of exit and future relationship arrangements will be agreed upon. AFME has highlighted the need for transitional arrangements which would keep existing market arrangements in place for a limited period of time following the UK leaving the EU. This is necessary to provide certainty and stability to business and market participants as they prepare for the future arrangements that have yet to be agreed between the EU27 and the UK. However, while some cliff edge risks would be mitigated (in whole or in part) by a longer transition period, risks remain that need to be addressed irrespective of a transition. In this paper, we have therefore focused on issues which we believe require intervention from policymakers and/or regulators in the UK and EU27 and are not easily resolved by banks’ own plans or industry solutions. We hope this paper will provide further helpful clarity for the forthcoming discussions on the future relationship between the European Union and the UK. We would value your feedback on the report, so please let us know if you have any comments or questions.

The “Global and European Green Finance Policy Directory” is authored by the GGFC, a group comprised of global and regional financial industry organisations. The GGFC was founded by the Global Financial Market Association (GFMA), the International Capital Market Association (ICMA), the European Banking Federation (EBF), the European Covered Bond Council (EMF-ECBC), the Institute of International Finance (IIF), the Loan Market Association (LMA) and the World Federation of Exchanges. Other organisations are participating as observers, including CERES, the European Financial Roundtable (EFR) and InsuranceEurope. The purpose of the Directory is to provide policymakers and global and regional market participants with a simple reference guide to the major initiatives on green finance, sustainability and climate change being implemented by international and regional bodies and industry organisations. The document is a public online resource. The list is also not exhaustive and will be updated regularly to reflect legislative and non-legislative developments in the area. It can be read by global vs regional initiative, the goal of the initiative (e.g. setting emissions standards, encouraging standardised disclosure and reporting), composition of the organisation’s membership, and links where further information can be found.