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For financial institutions and the market regulator alike, 2018 was above all the year in which key European laws such as the new Markets in Financial Instruments framework were implemented. However, it was also a year marked by a particular context: one in which there was a mobilisation due to the perspective of the United Kingdom leaving the European Union. The teams worked to enable institutions to optimise their preparations by considering every possible scenario. The national and European authorities also ensured that they had taken the necessary steps to minimise the effects of a no-deal Brexit.
“Over and above its immediate consequences, Brexit, with the departure of the European Union’s main financial centre from its perimeter, poses a major challenge for Europe’s Capital Markets Union plan”, explained Robert Ophèle, Chairman of the AMF.
A strong European conviction
In 2018, the AMF's international activities were fuelled by a deep European conviction: the need for closer convergence of supervision within the EU. The AMF backed an ambitious reform of the European supervisory authorities, including the European Securities and Markets Authority (ESMA), to enable a more uniform and effective supervision. This project also gave the European Union an opportunity to speak to third countries with a single voice. The AMF also stressed the importance of entrusting the ESMA with greater responsibility for the supervision of clearing houses under the reform of the European Market Infrastructure Regulation (EMIR).
Although some progress has been made, it has fallen short of the initial expectations due to the very strong resistance expressed by most Member States to any attempts to reinforce European integration. The AMF believes that the next European term should be an opportunity to formulate concrete and realistic proposals to promote the development of capital markets in the EU 27.
While the AMF is currently finalizing its proposals, Robert Ophèle has highlighted four key priorities to be dealt with at the European level:
The implementation of a digital strategy for financial services
Achieve the ambition for sustainable finance
Revisit the architecture of regulations on asset management
Render the information to retail investors more efficient.
Supporting innovation in a secure framework
In the last year, the AMF has also pursued its goal of accompanying innovation. After 2017, when meetings with project sponsors were held and studies of fundraising initiatives based on Initial Coin Offerings (ICO) were carried out, the AMF submitted its findings on the appropriate regulatory framework for these operations in February 2018. These actions made a significant contribution to the draft PACTE law, which was adopted by the French Parliament on 11 April 2019. It creates an optional visa for issues and an optional authorisation for digital asset service providers. Services for the custody and purchase/sale of crypto-assets against legal tender will be subject to mandatory registration under the rules against money laundering and the financing of terrorism. Once the text has been promulgated, the AMF will be responsible for its implementation, by adapting its general regulation and policy.
The law will also provide the AMF with new tools to protect investors: soliciting will therefore be prohibited for all token issues as well as service providers that have not received approvals or licenses from the regulator. The AMF could also request the blocking of fraudulent websites offering digital asset services.
Commitment to sustainable finance
Last autumn, the regulator unveiled its sustainable finance roadmap, which is another key component of its 2018-2022 strategic plan. Its priorities focus on accompanying market participants and innovation, participating in European and international initiatives, and supervising and educating investors. As early as 2018, the teams were mobilized, at the French level to monitor the implementation of Article 173 of the Energy Transition for Green Growth Act as well as increasing their skills on non-financial reporting topics and, at the European level, especially on how to integrate environmental, social and governance factors into risk management, investment strategies and how to take into account customer preferences.
In 2019, the AMF will publish its third report on socially responsible investment in collective investment schemes. In this respect, through the PACTE law, its remit has been extended and its powers reinforced. It will now ensure the quality of the information provided by management companies about their sustainable finance strategies.
The regulator will also publish its observations and recommendations regarding information about the social, societal and environmental responsibility of listed companies.