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COVID-19

A summary of AFME coronavirus-related capital markets, compliance and prudential advocacy as well as official-sector pronouncements

COVID-19 has had significant implications for our members globally with many having to focus resources on managing business continuity issues.

AFME is working together with our members and regulators to ensure that markets remain well-functioning and liquid in light of the market impact of COVID-19.

We are continuing to monitor developments and below is an overview of the most recent regulatory decisions and AFME responses where relevant.

If your questions cannot be answered here, please do not hesitate to contact our press team.

AFME COVID-19: Risk Assessment
To listen to our Markets, Compliance and Prudential audio updates, visit our Podcast page.
AFME published a research note on the Impact of COVID-19 on European Capital Markets: Market Update (14 July).
This follows a report on the “Initial impact of COVID-19 on Europe’s capital markets” (21 April).

Markets Markets

Offical Sector announcements:

Bilateral margining requirements: On 4 May, the ESAs published draft RTS to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements.

MiFID II compliance: On 6 May, ESMA issued a statement on risks for retail investors in the current market environment and reminding investment firms of key conduct of business obligations when servicing retail clients.
UK announcements: On 7 May, the BoE and PRA issued announcements regarding flexibility on resolution requirements, the effective removal of Pillar 2A capital requirements and a general statement on prioritisation in light of COVID addressing issues including climate change and LIBOR transition.

Compliance Compliance

Tracker document providing an overview of selected announcements from markets authorities at European and national level - updated April 21

Overview of statements from authorities on financial crime risks in the pandemic - updated April 24

Letters

Joint letter to EC on DAC6 deferral 20 April 2020
Joint industry letter on withholding tax challenges 20 April 2020

Prudential regulation & supervision; recovery & resolution Prudential regulation & supervision; recovery & resolution

AFME is working with official sector authorities to ensure that its members can continue to support their clients during these challenging times.

The EBA, ECB, FSB, the SRB and BoE/PRA have already issued a number of helpful clarifications and guidance which can be found here:

Tracker Document - Statements and actions currently undertaken by the official sector with respect to prudential requirements. (Updated - 28 August)

Blog: Is Europe doing too little too late again?

European authorities have made changes to help give banks enough capacity to support their customers in light of COVID-19, but have these changes gone far enough? Michael Lever, Head of Prudential regulation at AFME, is author of a piece that discusses this topic.