The EU T+1 Industry Committee has published its High-Level Road Map for the transition to a T+1 settlement cycle for securities on 11 October 2027. The roadmap contains a set of recommendations developed collaboratively by association representatives and workstream leads from various industry segments, and its technical workstreams, with broad industry representation. These non-legally binding recommendations are designed to serve as a practical, expert-led framework to assist market participants in identifying and addressing the most critical operational considerations and to support firms’ preparationsand budget allocations. Today’s release marks the culmination of five months’ work on the recommendations and the Industry Committee’s publication of the roadmap, which has also been shared with the EU T+1 Coordination Committee. The High-Level Road Map is available for download here: Shortening the settlement cycle to T+1 in the EU, and on the relevant industry associations’ websites. Giovanni Sabatini, independent chair of the EU T+1 Industry Committee, noted: “Today’s publication of the High-Level Road Map and the recommendations included therein marks the kick-off of a complex process to move EU and EEA markets to T+1 on the agreed date of 11 October 2027, in coordination with the UK and Swiss markets. We urge all market participants to review the recommendations, assess the impact on their systems and procedures and start planning how they want to prepare for the transition to T+1”. Sabatini added: “A key theme throughout this report is the imperative to enhance automation and eliminate manual interventions across all stages of the post-trade lifecycle.” The EU T+1 Industry Committee will host a launch event for market participants to discuss the recommendations on 3 July 2025. Register to attend the launch event virtually here: http://bit.ly/4nqBQhg

Commenting on the publication of the European Commission’s legislative proposal on Securitisation today, Adam Farkas, Chief Executive of the Association for Financial Markets in Europe (AFME), said: “We welcome the Commission’s legislative proposals that aim to address barriers to the development of the EU securitisation market. It is particularly positive that the Commission has adopted a holistic approach through a series of reforms. This approach has the potential to unlock the benefits of securitisation – an important financing tool that can contribute towards meeting Europe’s significant investment needs and support growth and EU competitiveness. In this regard, it is also encouraging that the Commission’s proposals acknowledge the current lack of sufficient risk sensitivity of the capital framework and the need to simplify due diligence and transparency requirements. “While the proposals are a step in the right direction, it is crucial to avoid introducing any measures that may inadvertently undermine the core objective of the reform to stimulate both demand for securitisation - through a growing investor base - and supply. Of course, a thorough assessment of the initiatives is still needed to understand the potential impact of the proposed reforms on the market. “As it is the first legislative initiative of the Savings and Investment Union strategy, it will be important that co-legislators take an evidence-based approach to the upcoming negotiations to help rebalance the financing structure of Europe’s heavily bank-based economy toward capital markets.” Following a preliminary review of today’s regulatory measures proposed by the Commission, AFME makes the following comments focusing on key positives and critical challenges to achieving the ultimate objective of effectively contributing to the Savings and Investment Union (SIU). In respect of the Securitisation Regulation (SECR): We strongly support the Commission’s intention to simplify the due diligence requirements under Article 5. For example, removing the requirement for EU investors to check the compliance of sell-side parties with the obligations stipulated in the SECR where the sell-side parties are based in the EU is a positive step in the right direction. However, these simplification efforts risk being undermined by the introduction of disproportionate sanctions, such as the ones which include fines of a percentage of global turnover. Not only will this measure discourage new investors from entering the market, but it could also end up driving currently active investors away, shrinking an already limited investor base. We also welcome the Commission’s intention to ease the reporting burden for banks by significantly reducing the number of required fields in the disclosure templates, which is likely to support increased issuance. However, we are concerned by the following two proposals in relation to Article 7: Broadening the definition of public securitisation: While the Commission’s intention to lower the reporting burden currently faced by issuers is helpful, this objective risks falling short if listing to EU trading venues is used as a distinguishing feature for defining public securitisations. If these listings are considered public, the additional unintended effect of doing this will likely be to drive listing away from the EU to foreign jurisdictions, and EU authorities’ oversight will decrease as a result. More generally, if the definition of public securitisation is drawn too broadly, a very limited number of private deals will see the benefit of the envisaged simplified template for private securitisations. In effect, the revised definition will impose the full extent of “public” reporting obligations on deals currently considered private, in which investors already receive all information required. This duplicative reporting requirement increases operational costs and creates yet another serious disincentive, this time, to issuance. Requiring private deals to report to EU securitisation repositories: Any requirement that private securitisations report to securitisation repositories would also have an adverse impact on issuance. This will increase both compliance and transaction costs. For example, it will particularly discourage first time issuers who may be considering using securitisation to fund their early-stage growth. In respect of third-country deals, EU template requirements already disincentivise non-EU clients from using EU banks, so requiring them to also report to EU securitisation repositories as a result of an EU investor’s participation in the transaction would have the effect of increasing the regulatory burden even more and add further complexity to the reporting regime. In this regard, we welcome the recommendation of the Joint Committee of the ESAs in the Article 44 Report of 31 March 2025 not to require third-country securitisations to report to an EU-registered securitisation repository. In respect of the prudential framework: We welcome that today’s proposal acknowledges that the current prudential framework creates undue barriers for credit institutions to issue and invest in securitisation. However, and subject to further analysis, AFME cautions against changes to bank capital treatment that would unintentionally inflate capital charges beyond current levels under the current regime for banks in any role. In relation to the concept of resilient transactions - which represents an additional layer of complexity and comes on top of the Single Transparent and Standardised (STS) label - it is crucial that the cost of complexity is countered by appropriate capital benefits impacting a meaningful proportion of the market. We support the fact that the Commission decided to address the treatment of securitisation under the Liquidity Coverage Ratio (LCR) and the opportunity to contribute to the consultation on the proposed changes to the delegated act. While AFME will develop further views in the coming weeks, our initial observation is that the benefit attributed to STS or resilient eligible transactions falls short of the ambition indicated in other areas of the proposal. With respect to Solvency II, it is positive that the Commission also intends to introduce reforms that support the return of insurers as investors in the securitisation market. It is indeed particularly needed to recalibrate capital charges for non-senior STS and non-STS tranches for this category of investors. We look forward to the upcoming consultation on the Solvency II Delegated Regulation. – Ends –

Following the adoption today by the European Commission of the Delegated Act to delay the implementation of the EU’s market risk framework by another year to 1 January 2027, Caroline Liesegang, Managing Director, Head of Capital & Risk Management at the Association for Financial Markets in Europe (AFME), commented: “AFME supports the Commission’s decision to delay the implementation of the market risk (FRTB) framework, given the need for further clarity on both substance and timing, as well as the need for alignment between jurisdictions, which is especially important for internationally-active banks. This is key to avoid unnecessary regulatory fragmentation. We also welcome the Commission’s clarification that last year’s communication package and related SSM/EBA guidance is not expected to change. Given the operational complexities and costs that some banks face for the maintenance of the current internal models, we welcome the flexibility provided for supervisory authorities in their assessment of current internal models. “However, further work remains to be done. Long-standing concerns remain within the market risk framework and will need addressing through targeted amendments to the framework. The Commission initiated its thinking on these changes in its recent consultation and we would strongly encourage work to continue progressing on this workstream in collaboration with the industry. We look forward to continuing dialogue with the Commission, the EBA and SSM as these issues evolve and as the broader international picture becomes clearer.” – Ends –

With the deadline for the Commission’s wide-ranging consultation on the integration of EU capital markets closing today, Adam Farkas, Chief Executive of the Association for Financial Markets in Europe (AFME), said: “AFME’s members share the EU’s ambition of building deeper and more liquid markets that are competitive on a global level. The EU has a moment of opportunity to attract global capital and must focus efforts on targeted, evidence-based policy proposals, that focus on growing demand from all investor types and upholding the principles of competition and user choice. However, we are deeply concerned that some of the proposals related to equity market structure contained in the consultation are not conducive to this end. On the contrary, we believe that measures which would reduce the complexity and high frictional costs of the current post trade ecosystem should be prioritised, and call for ambitious and innovative thinking to unlock competition in this space. We look forward to exchanging views with the Commission on this further ahead of the expected legislative proposal later this year.” In AFME’s response it: Cautions against changes to market structure AFME emphasises that the EU is unlikely to achieve its shared ambition for growth by fundamentally changing the regulatory framework for equities trading through replicating the market structure features of other jurisdictions (with different geographies, legislative frameworks, issuer and investor bases, and political priorities). Any radical changes to microstructure (such as the idea of introducing an order protection rule) would be highly undesirable and risk portraying the EU as being in a state of constant regulatory flux. Especially at a moment when investors - including those newly attracted to Europe in light of recent geopolitical trends - wish to navigate markets characterised by regulatory stability, predictability and consistency. Such detrimental changes would also burden market participants with considerable implementation and compliance costs. Emphasises the need to promote measures that will generate investor demand for EU securities AFME emphasises that building deeper and more liquid securities markets in the EU is a ‘demand’ issue and goes far beyond market infrastructure issues. Addressing this will require decisive action across Member States to build their supplementary pension systems through promoting an investment culture and financial education, as well as taking further steps towards harmonising tax and securities law frameworks. Calls for a streamlined EU regulatory framework AFME emphasises its support for a streamlined EU regulatory framework, making markets easier to navigate without compromising on safety and investor protection. The Association calls for an in-depth assessment of how the Lamfalussy process is functioning in view of the EU putting in place a more agile and effective regulatory and supervisory approach for globally competitive banking and capital markets. Calls for policymakers to prioritise access to markets for all investors Access to markets should be made more cost effective for all investors, and policy makers’ focus should therefore remain on addressing barriers to entry, such as the market failure in market data being available on a reasonable commercial basis, and inefficiencies in the post-trade ecosystem, which add unnecessary frictional costs to all market participants. Supports improving competition for post-trade financial market infrastructure services Several influential recent reports (Draghi, Noyer, Letta) have identified that the post-trade financial market infrastructure in the EU is complex, fragmented and suffers from a lack of competition between providers. AFME supports this analysis and believes that improving competition for the provision of post-trade financial market infrastructure services should be the critical objective of the new legislative proposal. Achieving this requires a multi-faceted approach. An important first step is increased regulatory scrutiny on the pricing of post trade services - for which incumbents have a quasi-monopolistic position - ensuring that they are fair and transparent. More ambitiously, the creation of a common issuance layer, potentially leveraging T2S,could be considered, as well as further exploration of potential new, innovative post trade models based on Distributed Ledger Technology (DLT). – Ends –

A significant milestone in the implementation journey was reached as the Committee reviewed a first draft of recommendations with capital market representatives The EU T+1 Industry Committee, chaired by Giovanni Sabatini, met in Brussels on Wednesday, 28 May, marking a significant milestone in the implementation journey towards a default T+1 securities settlement cycle. The Committee reviewed a first draft of the consolidated report of the recommendations of the Technical Workstreams with representatives from across the capital markets ecosystem. The recommendations will form the basis of a report, which is due to be published by the end of June 2025, of the blueprint of the changes that the EU T+1 Industry Committee believes must be collectively delivered to ensure successful delivery of the T+1 project. Key outcomes from the session: · Alignment on the recommended new “daily operational timetable” for “gating events” · Consensus on the governance framework for ensuring public-private collaboration · Agreement on the technical workstreams' preliminary recommendations · Clear next steps for finalising our report by June 2025 The EU T+1 Industry Committee has appointed PwC as an external consultant to support the significant coordination effort required for the T+1 initiative. All participants reinforced the urgency of preparation with Sabatini commenting: “As we progress toward our final recommendations, market participants must begin strategic planning and investment decisions to prepare for the October 2027 transition date.”

Commenting on the conclusion of the first EU-UK summit held today, Adam Farkas, Chief Executive of the Association for Financial Markets in Europe (AFME), said: “The positive outcome from today’s first EU-UK summit is a significant step forward in renewing and strengthening the bilateral relationship between the European Union and the United Kingdom. The summit has achieved meaningful progress in critical areas - defence, energy, and security. We hope that these commitments will pave the way towards future discussions for cooperation in other areas as well. Both the EU and UK could benefit from increased cooperation in the field of financial services. Reducing operational frictions for financial services firms who operate across both jurisdictions will bring significant economic benefits and we look forward to engaging in conversations on how this may materialise in practice over the coming years. “More specifically, AFME welcomes the decision to begin work towards linking the UK and EU Emissions Trading Systems. A linked carbon market would support liquidity, improve market efficiency, and strengthen the carbon price signal across both jurisdictions, helping accelerate the transition to net zero.” – Ends –

The Association for Financial Markets in Europe (AFME) welcomes the Joint Committee’s (JC) Article 44 report on the implementation and functioning of the EU Securitisation Regulation (SECR), published at a pivotal moment ahead of the European Commission’s anticipated legislative proposal in June. The report provides timely insights and includes several constructive recommendations which, if appropriately implemented, could materially enhance the efficiency and competitiveness of Europe’s securitisation market. However, AFME cautions that certain proposals, particularly those relating to scope, definitions and risk retention, may carry unintended consequences and merit close scrutiny. In particular, interpretive guidance in respect of risk retention has no doubt unintentionally created market disruption, both for CLOs and more generally securitisation in the primary market. Shaun Baddeley, Managing Director, Securitisation at AFME, commented: “We welcome the Joint Committee’s recognition of the need to streamline and clarify key aspects of the Securitisation Regulation. In particular, we support moves to reduce unnecessary compliance burdens and improve consistency across jurisdictions. At the same time, we urge policymakers to tread carefully in areas such as jurisdictional scope and the definition of public securitisations, where well-intentioned changes risk creating new uncertainty. Critically, resolution is needed in the short term either by supervisors or the ESAs to address uncertainty created by interpretive guidance in relation to Risk Retention. It is our understanding that the approach adopted by supervisors prior to the publication of the Joint ESA’s report should apply for CLOs that priced prior to its publication but have not yet settled. In general, a balanced, pragmatic approach is essential to unlock the full potential of the European securitisation market which is able to meaningfully contribute to economic growth and competitiveness.” AFME has published a detailed summary of its views on the JC’s recommendations. AFME looks forward to working closely with the European Commission, Parliament, and Council to achieve a balanced, proportionate recalibration of the Securitisation Regulation that will support a well-functioning securitisation market in Europe, delivering capital to the real economy while maintaining sound prudential oversight. – Ends –

The Association for Financial Markets in Europe (AFME) welcomes and strongly supports the European Commission's proposal to amend the CRR (Regulation (EU) No 575/2013) to permanently address the requirements for securities financing transactions (SFTs) under the net stable funding ratio (NSFR). The industry considers it essential to maintain the application of the current 0%, 5% and 10% Required Stable Funding (RSF) factors for reverse repos secured by Level 1 HQLA and non-Level 1 HQLA and unsecured lending transactions. This proposal is a recognition by the European Commission that a reversion of the Basel Committee for Banking Supervision (BCBS) levels would be inconsistent and a significant outlier to the more realistic and permanent treatments in other major jurisdictions, including the US, UK, Japan and Switzerland and would therefore distort the playing field and unduly disadvantage European banks in comparison to their third country peers. We are confident that the co-legislators will come to the same conclusion. Commenting on the European Commission’s proposal,Caroline Liesegang, Managing Director, Head of Capital & Risk Management, Sustainable Finance and Research at AFME,“AFME has been an early advocate for the need for the continuation of the current RSF factors on a permanent basis. This is an essential element for the development of a well-functioning, liquid and attractive sovereign debt market and a deep diversified SFT market for EU debt instruments. Yesterday, the European Commission set the first and necessary step, but there is more work to be done. It is key for the co-legislators to grasp the level playing-field nature of the issue at hand and to progress this file at pace to ensure a political agreement is reached before the sunset clause of 28 June 2025. We are therefore hopeful that the co-legislators will fast-track this proposal. We also take note of the European Banking Authority (EBA)’s mandate to report to the European Commission by January 2029 on the appropriateness of the current calibration. AFME would caution against the risk of introducing policy recommendations and changes in a monitoring report without consulting appropriate industry stakeholders”. AFME looks forward to working with the European Commission, co-legislators and other industry stakeholders to ensure the successful progress and finalisation of this proposal to support the ongoing development of a robust and resilient financial system that can finance the real economy and support a competitive and prosperous Europe . – Ends –

The Association of Financial Markets in Europe (AFME) strongly welcomes the Savings and Investment Union (SIU) communication published today by the European Commission outlining the objectives and strategy for achieving and delivering the long-awaited, and much needed tangible bene􀏐its of a successful integration of banking services and capital markets in the EU. AFME strongly supports and concurs with the view that achieving a single market for banking services as well as for savings and investments requires a more ambitious approach to policy coordination and decision making among Member States. This is imperative to delivering on the broader ef􀏐iciency and prosperity goals of the overall EU single market. Commenting on the Commission’s communication, AFME’s CEO, Adam Farkas, said, “AFME has been a strong supporter of the CMU project since its inception in 2015 and we are encouraged to see the renewed ambition of the Commission to pursue and expand the objectives of the CMU through the Savings and Investments Union. It is now for all involved, including EU institutions and Member States, to translate words into transformative action.” With respect to specific limbs of the strategy, he added “Growing capital markets goes hand in hand with the ability to attract larger pools of private capital. The SIU importantly recognises this dynamic, and the key role Europe’s individual savers can play to support growth. The greater focus reallocating EU savings to productive investments is very much welcome and should contribute to boosting the wealth of Europe’s citizens. We are also very encouraged to note that reviewing the regulatory framework for securitisation is among the key priorities highlighted in the strategy. We call on the Commission to propose a holistic and ambitious approach in this area. This should include changes to the prudential framework for both insurers and banks to ensure securitisation can better achieve its potential as a useful financing tool able to support EU investment needs over the long-term. Today’s strategy also rightly identifies reforming the post-trading infrastructure as a key area of focus and action. Fostering competition, improving transparency and increasing the use of harmonised standards are critical factors in supporting the broader development of EU securities markets and reduce costs for issuers and investors. As reflected in the Commission's strategy, it will be important that future initiatives in the post-trade area leverage on the potential that recent innovations in technology, such as DLT, offers to create a digitally advanced capital markets union. We also look forward to understanding how the Commission intends to move forward on better integrating the trading landscape in the EU; this is an area where barriers need to be reduced while ensuring investor choice is maintained. A more integrated supervisory architecture would be a positive development if it contributes to reducing cross-border frictions and acts as an enabling factor for the consistent application of the single rulebook. However, we believe a gradual approach to any single supervisory model is needed, starting with the introduction of genuine forbearance powers for the European Supervisory Authorities while pursuing a broader review of their governance structures and carefully considering the type of entities for which EU supervision would be the most appropriate. An in-depth reflection should also carried out to assess how the Lamfalussy process is functioning in view of the EU putting in place a more agile and effective regulatory and supervisory approach for globally competitive banking and capital markets. Lastly, it is also very much welcome that the Commission remains committed to achieving an integrated and competitive EU banking sector. The single rulebook for EU banks has been an important development for the sector, and much progress has been made towards the Banking Union and increasing the resilience of the sector. At the same time, it makes sense to take stock of the regulatory and supervisory framework to which banks are subject to and assess the situation of the single market for banking, as well as banks’ competitiveness. It will be important that this assessment is carried out in a transparent manner to ensure that conclusions are based on robust evidence and data. On behalf of its members, AFME looks forward to continuing to play a constructive role in supporting EU institutions and Members States in achieving a true single market for 􀏔inancial services. It is more vital than ever to realise the bene􀏔its of this single market to create wealth for the citizens of Europe, bridge our competitiveness gap on the global stage and support the EU’s economic prosperity and security in a disputed geopolitical environment.” – Ends –

The Association for Financial Markets in Europe (AFME) welcomes today’s adoption by the European Commission on the EU Sustainability Omnibus package. AFME strongly supports the initiative to streamline the EU sustainable finance regulatory framework, ensuring it focuses on mobilising capital and financing for the transition while minimising regulatory burdens.  This should go hand in hand with measures to create the economic conditions to support investment in companies as they transition, as the Commission aims through the Clean Industrial Deal announced today.   Adam Farkas, AFME CEO commented: “We welcome today’s announcements and are pleased to see the Commission taking forward the recommendations of the Draghi report and proposing to streamline the sustainable finance framework. It is essential that the Council and European Parliament at least maintain the level of ambition of the Commission’s proposals and that the Commission delivers on its commitment to streamline the ESRS. For the proposals to achieve effective burden reduction for businesses, the framework for banks’ sustainability reporting, risk management and associated supervisory expectations needs careful review to ensure consistency of the simplification objective.” Oliver Moullin, Managing Director, Sustainable Finance, commented: “The omnibus provides a vital opportunity to reorientate policy towards measures that are most impactful in mobilising capital for the transition while streamlining regulation which is creating burdens on companies and financial institutions without meaningfully achieving this objective.   Sustainability reporting and due diligence measures can only go so far in driving decarbonisation of the economy. It is crucial that the EU focuses on putting in place the policies and roadmaps for companies to have the information and incentives to adapt their businesses. This will in turn help channel finance towards those needs. The Clean Industrial Deal published alongside the Omnibus today sets out valuable measures to help achieve this.”  AFME’s assessment of the Commission proposal  The European Commission’s proposal is an important step forward in addressing the challenges with the existing framework. We welcome that the Commission has listened to feedback from stakeholders on aspects that are not working or require simplification. In addition to simplification for smaller companies, it is essential to also reduce burdens for larger companies and financial institutions which are core anchors of the economy. Reducing their reporting burdens will also benefit the thousands of SMEs in their value chains and whom they fund. As the proposal will take some time to be adopted and take effect, it is essential to provide clarity to companies currently reporting under CSRD (i.e. the first wave of reporters in 2025) are not required to report under existing CSRD pending the amendments and revised ESRS taking effect.   CSRD: We welcome the commitment to streamline the EU sustainability reporting standards. It is essential to ensure that disclosures are focused on decision-useful information and maximise international alignment. It will also be important to ensure that financial institutions’ reporting and risk management requirements are adjusted to accommodate the changes to non-financial companies’ reporting. It is also essential to improve alignment with the global ISSB standards.   CSDDD: We strongly support the Commission’s proposal which addresses key concerns under the Directive, including removing the review on its potential extension to financial services, enhancing the practical application of due diligence requirements and respect for national liability regimes, and better aligning the provision on climate transition plans with the language of the CSRD. Taxonomy: We welcome the consultation published today seeking to address challenges with taxonomy reporting and the usability of the “Do-No-Significant-Harm” test under the EU Taxonomy Regulation. It is vital to review reporting requirements which are not providing meaningful information yet create significant burdens for banks and their clients, and to improve usability of the taxonomy. We also welcome the proposed postponement of the Trading Book and Fees & Commissions KPIs under banks’ Taxonomy Reporting. Alongside the legislative proposals, it is essential that the European Commission reviews the remainder of the regulatory framework for sustainable finance to ensure a holistic review of competitiveness and simplification, addressing issues such as:  Implications for banks’ disclosures under Pillar 3 ESG disclosures and supervisory risk management requirements  Ensuring the SFDR Review is coordinated with the outcome of the Omnibus  Simplifying the MiFID sustainability preferences regime  Working with the industry to address implementation challenges arising from guidance  AFME’s detailed recommendations ahead of the omnibus proposal are available here. – Ends –