Case studies on the significance of the ongoing EU banking reforms for the end-users of capital markets and the real economy AFME has published a new report highlighting the significant impact that key elements of the European Commission’s Risk Reduction Measures (RRM) legislative package could have on Europe’s capital markets and the wider economy. The report sets out eight case studies which explore the potential impact of the RRM on capital markets products and transactions used by different real economy actors such as corporates, institutional investors and EU governments. It is being released at an important moment for Europe’s financial markets where, a decade after the financial crisis, significant progress has been made towards building a stable and resilient financial system. The Risk Reduction Package marks an important step towards completing such efforts, which comes at the same time as the EU is implementing an ambitious programme to develop Europe’s capital markets and establish a Capital Markets Union. The report explains why the legislative proposals presented by the European Commission should not be considered in isolation, but rather in light of the very significant links they have with capital markets and the broader economy. It includes constructive proposals for how to achieve appropriate and effective prudential rules while also enabling capital markets to support Europe’s growth objectives.

The AFME European Primary Dealers Handbook is an invaluable reference work for European government bond market participants, as well as policymakers and journalists. The handbook offers a detailed description of the infrastructure of the primary and secondary markets in 16 European countries and the organisation of each of their Primary Dealer systems.

This educational document provides our members with a structured approach to understanding the post-tradetransparency (PTT) obligations defined under Article 6, 10, 20, and 21 of MiFIR. This document also highlights thekey challenges and practical implementation options for the impacted qualifying investment firms to consider as theyprogress with plans to be MiFID II compliant. This document will cover Firms impacted by MIFID II / MiFIR’s post-trade transparency requirements The data required to be reported When and where the data is to be reported Reporting scenarios Challenges that market participants will need to consider in order to implement the necessary reporting solutions Explanation of the relevant terms such as Approved Publication Arrangements (APAs), Systematic Internaliser (SI) andpost-trade transparency deferrals This document will not cover Transaction or position limit reporting Inducements or any contractual arrangements between counterparties This document is a collective effort by a number of subject matter experts (SMEs) from across the industry on the AFMEPTT Working Group. This document incorporates feedback from SMEs with industry and regulatory experience and aftera series of consultation discussions.

2017 has been a year of structural and political change, leaving the European capital markets industry with more questions than answers. At such a time of uncertainty, our role as a pan-European trade group could not be more important, not just to present the voice of the wholesale financial markets in Europe, but to provide a meaningful, fact-based contribution to help shape the future of our industry. AFME is committed to fostering deep and integrated European capital markets which serve the needs of companies, investors and savers across Europe. In the context of theevolving relationship between the EU and UK we believe this mission is best achievedby providing a bridge between EU27 and UK policymaking. As we look towardsthe next twelve months, AFME will continue to perform this role, representing theindustry and bringing to bear deep policy and technical expertise. We are now present on-the-ground in London, Brussels and Frankfurt, and AFME staff continue to make the industry voice heard through regular meetings with local policymakers, regulators and market participants across the EU27. As we enter the next phase of Brexit, it is critical that policymakers are well-informed of our industry’s concerns and the potential impact their decisions could have on the financial services sector. AFME’s fact-based contribution remains central to the debate. We continue to hold engagement meetings with officials and policy makers across Europe, calling for a smooth transition to ensure European capital markets are able to continue to function well. To support our asks, AFME has produced a portfolio of factbasedreports which contribute meaningful data on the potential impact of Brexit onthe wholesale banking industry, end-users and supervisors, most recently Bridging toBrexit: Insights from European SMEs, Corporates and Investors. This year marked an important milestone as the European Commission published its mid-term review of the Capital Markets Union (CMU) initiative. AFME has been a strongadvocate of the CMU initiative, which is more important than ever to boost growthand investment and channel capital to the real economy. Going forward, the focus onstrengthening supervisory powers, fintech and sustainable finance, among others, areall important CMU priorities which will ensure the project remains fit for purpose. One of AFME’s ongoing priorities continues to be raising awareness of the role capitalmarkets play in promoting growth. This year we produced two reports outlining howCMU can help address two key issues: the shortage of risk capital for high growthcompanies and the need to increase private investment in infrastructure. Addressingboth of these will help ensure that Europe continues to see steady growth. It is undoubtedly a challenging time for our industry in Europe, and AFME is dedicatedto promoting the ‘E’ in AFME more so than ever. I would like to conclude by expressing my sincere appreciation to my fellow AFME Board members and staff. I am so grateful for all they do for the industry. Michael Cole-Fontayn Chairman Association for Financial Markets in Europe September 2017

The market place for the cross-border provision of financial services between the UK and the EU is large and active and reflects over three decades of integration and the implementation of the single rulebook. The UK exit from the EU will change this. A new long-term partnership agreement will need to be negotiated and agreed, and transitional measures defined to help mitigate the impact of a revised market framework for businesses that buy and sell between the EU and the UK. The regulatory framework and financial passport that has enabled EU-based customers to access the diverse suite of cross-border financial products and services from UK-based banks1 will cease to apply after the UK’s exit from the EU. The same holds true for UK-based customers accessing financial products and services from EU-based banks. What, if anything, will replace these current rights to contract for such financial products and services between the EU and the UK remains unclear. This has important implications for the many customers that hold contracts for the provision of financial services between the two markets where the duration extends beyond the date in 2019 when the UK is expected to exit the EU. It is estimated that €1.3 trillion of UK-based bank assets are related to the cross-border provision of financial products and services to a variety of customers ranging from governments and individuals to businesses of all sizes. These services include lending and capital markets, risk management and foreign currency products and services spanning the entirety of the financial services sector, including banking, insurance and investment management. A significant proportion of this back-book of contracts extend beyond the 2019 exit date, providing important funding and risk management for businesses. Many of these services support EU exporting businesses that are key drivers of the EU and UK’s international earnings and strong contributors to economic growth and job creation. European and UK businesses are increasingly concerned about the potential impact on their existing contracts. The UK exit from the EU potentially creates significant uncertainty for these businesses, including with respect to the continuity of the contracts which support their funding, economic activity and risk management. Early action is required to provide the necessary clarity that these contracts will continue following the exit of the UK from the EU.

More than one year ago the UK public voted for the UK to leave the EU. With the Article 50 process being triggered in March, the two-year Brexit negotiation process is now well underway. AFME has argued consistently that during the negotiation process, market efficiency and financial stability must be safeguarded. The Brexit negotiations are taking place under significant time pressure with the UK’s membership of the EU due to end on 29 March 2019. Faced with no clarity on the future relationship between the EU and the UK, market participants are having to take important decisions amid considerable uncertainty. In light of this, AFME and others have consistently made the case for transitional arrangements following the Article 50 negotiation period. This note is intended to explain in more detail the importance and necessity of transitional arrangements as well as summarise our views on what such arrangements should look like. While we believe that transitional arrangements are essential, we share the view of the European Council that they must be clearly defined, limited in time, and subject to effective enforcement mechanisms. We also recognise the EU27’s prioritisation of matters to ensure an orderly withdrawal and the core principles set out in the Council Guidelines including the integrity of the single market. We believe that transitional arrangements are necessary to support these objectives of an orderly withdrawal, ensuring financial stability and the prosperity of both the EU27 and the UK. We urge the negotiators to progress with reaching agreement on the items under discussion in phase one of the negotiations in order to be able to move to discussing transitional arrangements as soon as possible.

The report demonstrates the industry's active support for the European Commission’s recent initiatives on infrastructure. These include the recent revision of the infrastructure capital requirements in the context of Solvency II and a potential extension of the European Fund for Strategic Investments, currently being discussed, which could extend the initial EUR 315bn fund to EUR 500bn for jobs and growth and further leverages private sector investment. You can download a copy of the Guide here and its accompanying press release here. This report is a review of the state of infrastructure financing, investment and related initiatives in Europe, and an assessment of how to further advance and encourage private sector finance for infrastructure projects. The review was undertaken as a follow up to the ‘AFME-ICMA Guide to Infrastructure Financing’ published by the two associations in June 2015. Studies show that a substantial increase on current investment levels in infrastructure is required to support future expected economic growth. Since the financial crisis, institutional investors have substantially increased their investment in infrastructure, but this welcome trend requires further encouragement, which may be achieved via a mix of financial instruments, innovative financing solutions and familiarity with the different risk and return profiles of individual projects. The review highlights some of the measures which could help to generate a positive environment to boost private sector infrastructure investment, including: understanding, structuring and allocating risk, including country-specific risk the importance of coherent and trusted legal frameworks to ensure long-term regulatory and political stability, and the equal treatment of foreign, local and institutional investors developing expertise and standardisation of best practice more and better-quality disclosure of information on infrastructure projects and on ongoing infrastructure debt performance a review of regulation to ensure that investing in infrastructure does not become punitive as against other asset classes The Guide is part of several industry initiatives supporting the European Growth agenda, which include ‘Unlocking funding for European investment and growth’ co-written with Oliver Wyman, ‘Bridging the growth gap’, co-written with The Boston Consulting Group (BCG), the AFME SME finance guide to support European SMEs ability to raise all types of finance, and the recent reports on‘The shortage of risk capital for Europe’s high-growth businesses’ and ‘Bridging to Brexit: Insights from European SMEs, Corporates and Investors’.

The report presents updated key trends in remuneration in banking and capital markets since the crisis based on a detailed study conducted by McLagan Aon Hewitt of 18 AFME Board member firms.

One year on from the UK’s referendum vote to leave the European Union and with exit negotiations just beginning, AFME has published a new report, Bridging to Brexit: Insights from European SMEs, Corporates and Investors. The report, commissioned from The Boston Consulting Group (BCG) with support from Clifford Chance, examines the impact of Brexit on SMEs, large corporates and investors and in particular, on their use of wholesale banking and capital markets services. To assess the potential effects, BCG interviewed 62 end users of wholesale banking services, as well as 10 trade associations. The feedback and insights from these interviews are supported by quotes and real-life case studies which illustrate the potential impacts to their businesses. BCG then presents a quantitative analysis of specific Brexit-related challenges that the banking industry will face in trying to match client expectations identified in the interviews. The findings of this report indicate that a hard Brexit will be a particular challenge for SMEs, but also raises issues for corporates and investors, with wider implications for growth in the real economy. The resulting potential fragmentation creates an even greater need for timely implementation of the Capital Markets Union initiative, of which AFME is a strong supporter. We hope this report will provide helpful feedback for policymakers during the forthcoming discussions on the future relationship between the European Union and the UK. Read the press release here. Please click here to download the summary document Available in.... French German Italian Spanish

To mark the launch of the FX Global Code of Conduct on 25 May 2017, the GFMA’s GlobalFX Division, in conjunction with the Investment Association, the ACI and a number of othertrade bodies, hosted an evening panel session in London with some of the leading figuresbehind the development of the Code. The Global Financial Markets Association (GFMA) represents the common interests of theworld’s leading financial and capital market participants, and speaks for the industry onthe most important global market issues. The complete FX Global Code of Conduct is a set of global principles of good practice inthe foreign exchange market. It was developed to provide a common set of guidelines topromote the integrity and effective functioning of the wholesale foreign exchange market.It is intended to promote a robust, fair, liquid, open, and appropriately transparent marketin which a diverse set of market participants, supported by resilient infrastructure, are ableto confidently and effectively transact at competitive prices that reflect available marketinformation and in a manner that conforms to acceptable standards of behaviour.The GFMA’s Global FX Division is fully supportive of this initiative. Given that foreignexchange underpins international trade and investing, a single, global code provides acommon reference point to encourage good practice and re-build public confidence in theFX market. The GFMA is pleased to provide the following summary of the panel discussion.