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AFME: Equity and hybrid markets hold solution to European COVID-19 corporate recapitalisation
19 Jan 2021
Press releases available in: DE, EN, ES, FR, IT A report by the Association for Financial Markets in Europe (AFME) and PwC reveals that an equity shortfall of up to €600bn threatens Europe’s economic recovery despite the significant public support measures and private capital made available across Europe to support economies during the pandemic. AFME calls on the European Commission and members states to introduce measures to bolster Europe’s equity and hybrid markets and expand funding avenues for businesses, further enabling Europe’s economic recovery In a report published today (19th) in partnership with PwC, AFME warns that Europe needs to bridge a gap of €450-600bn[1] in equity needed to prevent widespread business defaults and job losses as COVID-19 state support measures are gradually reduced. The report Recapitalising EU businesses post COVID-19 reveals that despite the support provided by governments and the private sector since the start of the pandemic, 10% of European companies have cash reserves to only last six months. The pan-European trade association is calling on authorities to explore and develop further short-term measures to support Europe’s equity and hybrid markets and accelerate the Capital Markets Union to help fund the recovery. Unless urgent action is taken, a spike in insolvencies could start as early as this month and threaten the EU’s recovery prospects, AFME warns. The report presents insights from interviews with businesses and private sector investors from across the continent to propose solutions to Europe’s emerging funding gap. The findings reveal that many mid-size and SME corporates do not wish to give up control of their business but are willing to pay a premium not to dilute their voting rights, as well as are willing to distribute a share of profits to investors. Hybrid instruments are ideally suited to address these needs. In order to bolster capital markets to support businesses in the recovery phase, AFME is outlining the following recommendations: Proposing a new EU-wide hybrid instrument designed specifically for the corporate sector. This could be in the form of a new preferred shared instrument, which is state-aid compliant, to build scale and liquidity, and which ideally could be developed to comply with social investment objectives to attract maximum investor interest. Scaling up existing EU-wide recovery support schemes such as the EIF European Guarantee Fund tailored to the needs of SMEs, particularly the smallest companies. Replicating existing member state best practices on hybrid instruments, as well as raising awareness of the range of capital markets instruments available to mid-caps and SMEs who may be unaware such options exist Exploring further use of innovative instruments, such as dual class shares to address the control concerns of companies as well as debt for equity swaps to reduce leverage. Recalibrating state aid rules for a systemic crisis. Accelerating equity investment measures under the Capital Markets Union project. Adam Farkas, AFME’s Chief Executive Officer, said: “While additional debt and state support have provided the short-term rescue to businesses across Europe, we now need to move beyond the short-term bridge finance and to focus on long-term repair and recovery. “As European businesses strive to recover from the economic crisis, alternative types and sources of funding will be required to help mitigate their mounting debt burden while also allowing them to invest in their future. This is where hybrid and equity markets can play a key role in supporting Europe’s recovery. “The size of the challenge calls for urgent action. With a shortfall of up to €600bn threatening Europe’s recovery, we are calling on policymakers to work with the private sector at the national and EU levels to implement solutions to ensure midcaps and SMEs in particular have the resources they need to recover post-COVID-19.” Nick Forrest, leader of PwC’s economics consulting practice, said: “The Covid-19 crisis risks leaving a long-term scarring effect on the economies of Europe. This means restoring the equity capital base of European corporates is essential for them to drive investment, innovation and growth.” “The unwinding of Government support and anticipated release from Covid lockdown measures with a successful vaccination programme means that now is the time to put in place the equity and hybrid financial capacity, and infrastructure to drive recovery of the European economy.” – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747 Notes: AFME (Association for Financial Markets in Europe) promotes fair, orderly, and efficient European wholesale capital markets and provides leadership in advancing the interests of all market participants. AFME represents a broad array of European and global participants in the wholesale financial markets. Its members comprise pan-EU and global banks as well as key regional banks, brokers, law firms, investors and other financial market participants. AFME participates in a global alliance with the Securities Industry and Financial Markets Association (SIFMA) in the US, and the Asia Securities Industry and Financial Markets Association (ASIFMA) through the GFMA (Global Financial Markets Association). For more information please visit the AFME website: Follow us on Twitter @AFME_EU Key features of the proposed Covid-19 preference share: Low fixed basis preferred dividend to provide investors with some cash flow certainty. The preferred dividend could be combined with an increasing profit-sharing element (based on a step-up scheme) that would allow investors to benefit from an upside and provide corporates with an incentive to redeem these shares later on (and providing investors with an exit mechanism). Like a typical preference share, this instrument would not entail voting rights to address companies’ reluctance to cede control at least in the short-term. To sharpen the incentives for companies to take appropriate action to restore profitability as quickly as possible, this could after a certain time period be convertible into equity, or to provide investors with some say over the running of the company if investing for the long-term. To incentivise investors, the investment could be made tax deductible or be exempt from capital gains taxes in the first 5 years. The full proposals for the Commission and member states to accelerate recapitalisation in the EU are: Develop a Covid-19 recapitalisation instrument: agree a common, standardised recapitalisaton instrument to be deployed in conjunction with a corporate education programme Scale up existing recapitalisation schemes: scale up the European Guarantee Fund and replicate existing initiatives at member state level. Develop public-private working groups: develop public-private forums to develop new schemes and run corporate education programmes. Develop a EU-wide public-private investment fund: develop a private-public scheme with pricing support by the public sector and private sector support with scheme administration and investment Introduce investor incentives: introduce time-limited capital gains tax exemptions and temporary adjustments to regulatory capital and solvency requirements Lower the cost of public equity issuance for businesses: equity raising in public markets is much more costly than debt finance and can be prohibitive for smaller corporates. This cost could be reduced through grants or subsidy schemes and regulatory simplification in the capital raising process. Simplify state aid rules: broaden state aid eligibility criteria, extend repayment periods and link EU RRF funding to establishing recapitalisation schemes in member states Deliver on CMU and Banking Union: develop SME pan-European exchanges, remove structural and regulatory obstacles to bank leveraging [1] Excluding any equity provided by EU promotional banks.
AFME: Commission’s revised action plan for NPLs from Covid-19 disappoints
16 Dec 2020
Following today’s publication of the European Commission’s renewed action plan for non-performing loans (NPLs) in the aftermath of Covid 19, Michael Lever, AFME’s Managing Director, Prudential, said: “The Commission’s NPL action plan launched today is an unambitious review of its 2017 proposals. It doesn’t take into consideration that today we are facing a NPL crisis caused by an exceptional economic downturn resulting from the Covid-19 pandemic. “While we welcome a renewed commitment to finalising the secondary markets directive and agree on the benefits from a more harmonised insolvency framework, neither of these things will be sufficient to address the post Covid-19 build-up of NPLs. “We have also noted the Commission’s proposals on asset management companies as a means to facilitate a reduction in NPLs. While asset management companies may have a role to play in managing homogeneous portfolios of non-performing loans, we believe that in most casesbanks are more likely to maximise returns from their NPLs by retaining management control of these assets, while at the same time remaining connected to their impacted clients. “Only specific measures to help banks better manage NPLs, such as an improved NPL securitisation framework, will be able to move the needle in this area. Although the changes in the securitisation capital markets recovery package agreed earlier this month provide some improvements on the current treatment of NPL securitisation, they fall short on delivering a framework that fully caters for European needs and specificities. “We are also calling on the Commission to re-examine the Pillar 1 backstop that came into force last year to ensure is fit for purpose. Elsewhere, restructuring by dedicated internal bank workout units can provide a particularly effective tool for NPL management, especially for more heterogenous portfolios. The Commission should also revisit the adjustment of LGDs for massive disposals of NPLs which only runs until June 2022 – clearly the length of this derogation needs to reflect the impact arising from the current circumstances.” – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747 Notes: Link to AFME position paper on NPLs in the aftermath of Covid-19. AFME (Association for Financial Markets in Europe) promotes fair, orderly, and efficient European wholesale capital markets and provides leadership in advancing the interests of all market participants. AFME represents a broad array of European and global participants in the wholesale financial markets. Its members comprise pan-EU and global banks as well as key regional banks, brokers, law firms, investors and other financial market participants. AFME participates in a global alliance with the Securities Industry and Financial Markets Association (SIFMA) in the US, and the Asia Securities Industry and Financial Markets Association (ASIFMA) through the GFMA (Global Financial Markets Association). For more information please visit the AFME website: Follow us on Twitter @AFME_EU
AFME: EBA’s Basel III assessment underestimates impact of Covid-19 on banks’ balance sheets
15 Dec 2020
Following today’s publication of the EBA’s updated assessment of the impact on the capital requirements of Europe’s banks from implementing the December 2017 Basel III agreement in Europe, Michael Lever, AFME’s Managing Director, Prudential, said: “The EBA’s evaluation shows Europe’s largest banks, which account for most of the region’s assets, are still facing an increase of approximately 20% in their capital requirements from the European implementation of Basel III. Moreover, this estimate is based on 2019 data which is likely to be nearly18 months out of date by the time the European Commission issues its CRR3 proposal implementing the Basel agreement next year. “In addition, the EBA’s analysis excludes any detailed quantification of the financial impact from the Covid-19 pandemic, although its simulations suggest further material increases in capital shortfalls. As a result, it is highly likely that today’s report underestimates the full impact on banks’ balance beyond that resulting from the finalisation of Basel III and further undermines the G20 and EU commitment of no significant capital increases from the finalisation of the post 2008 crisis regulatory framework. “This makes it imperative that the Commission commits to undertaking a further evaluation of the combined impacts of Basel III implementation and Covid-19 on banks’ capital requirements based year-end 2020 data, or later, before the CRR3 proposal is finalised.” – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747 Notes: AFME (Association for Financial Markets in Europe) promotes fair, orderly, and efficient European wholesale capital markets and provides leadership in advancing the interests of all market participants. AFME represents a broad array of European and global participants in the wholesale financial markets. Its members comprise pan-EU and global banks as well as key regional banks, brokers, law firms, investors and other financial market participants. AFME participates in a global alliance with the Securities Industry and Financial Markets Association (SIFMA) in the US, and the Asia Securities Industry and Financial Markets Association (ASIFMA) through the GFMA (Global Financial Markets Association). For more information please visit the AFME website: Follow us on Twitter @AFME_EU
Climate Finance Market Structure must grow at an unprecedented scale, speed, and geographic scope to meet the investment needs to transition to a low carbon economy.
3 Dec 2020
The Global Financial Markets Association (GFMA) and Boston Consulting Group (BCG) have today published a global report outlining the market-wide and sector-specific recommendations necessary to accelerate investment in climate finance. The report, “Climate Finance Markets and the Real Economy,” is a call to action for coordinated and concerted action by the public, social, and private sectors to significantly scale the Climate Finance Market Structure (CFMS) over the next three decades. These include a call for evolving our current market structure to address the advent and needs of climate finance and the creation of financial instruments and structures required to continue to serve the financing, investment and risk management needs for a broad set of market participants, as well as market wide sector, or individual corporate, and region-specific changes necessary to motivate investment. The report also highlights the role that capital markets and other participants must play to support transition pathways at the same time continue to serve their clients, investors, and the societies where they want to do business. “We recognise that in order to meet the targets set out in the Paris Agreement we need to act quickly to build a high-functioning market structure that can facilitate a significant increase in the level of investment in the climate transition,” said Steve Ashley, Nomura Head of Wholesale Division and Chairman of GFMA. “It’s important to note that, while the banking and capital markets sector stands ready to facilitate change, we need the support of policymakers and the wider private sector to create the incentives to make this work. We hope this report will act as a call to action.” Written jointly by GFMA and BCG and advised by contributing member financial institutions, the report is based on interviews conducted with more than 100 market participants globally, during the third quarter of this year. The report is being published ahead of GFMA’s Annual Capital Markets Conference on Sustainable Finance. “This report was developed by leading global capital markets firms and related stakeholders and seeks to identify and to provide a concrete, actionable, and comprehensive roadmap to develop a climate finance market structure to increase the quantity and quality of financing for climate change mitigation and adaptation,” said Kenneth E. Bentsen, Jr., CEO of GFMA and President and CEO of SIFMA. Roy Choudhury, Managing Director and Partner at BCG, added: “This report includes an in-depth analysis of 10 sectors which generate 75% of the world’s carbon emissions and provides clarity on the decarbonization levers by sector, as well as the investment needs by sector and region,” “The banking and capital markets sectors plays a critical role in the CFMS transformation as an intermediary between the supply and demand for capital—as a lender, arranger, and investor. Innovation will be critical to scale climate finance, more specifically, financial products, to mobilize capital across a broad range of investors and promote climate finance awareness and literacy.” This report estimates a $100-$150 trillion investment needs over the next three decades to transition to a low carbon economy. This translates to at least $3–$5 trillion of investment per year – an increase of five to eight times from current levels. The report also highlights a necessary shift of the CFMS to focus more on the need for “green” equity to support low-emissions projects, noting that 35% of the funding needed to meet the Paris 2C requirements is required from equity, alongside 44% from loans and 21% in bonds. In order to motivate this significant rise in investments aligned to climate finance, the price of carbon must rise to fully price in emissions. The climate finance needs are also not linear over the next three decades— lack of urgent action today will result in significantly higher need for climate adaptation and mitigation investments tomorrow. A key risk identified to the efficient scaling of the climate finance market is the need for policymakers and broader society to consider the role that financial market participants currently serve supporting the broader economy and economic policy frameworks that underpin and will need to align with Paris Agreement targets. Currently, many counterparties utilizing low GHG emission business models are economically uncompetitive due to the absence of carbon pricing and there are also counterparties where the sector, counterparty or the region have yet to identify viable transition pathways to a low GHG business model. Once the level playing field and transition pathway questions have been addressed, this will unlock the pipeline of investment and financing opportunities for banks and capital markets, with the financing proceeding on an economically sound basis. The unprecedented call to action[1] aims to help mitigate substantial mis-pricing and potential financial stability risks which would undermine the long-run ability of the financial system to direct finance to fully support the Paris-aligned transition. “Achieving the necessary pace and scale of growth in climate finance will require first significant new innovations to evolve the current financial market structure to enable the needed efficiency, transparency, and scalability to address climate risks. This also requires concerted and coordinated action by all stakeholders—the public sector, the real economy sectors, the banking and capital markets sectors, investors, asset managers, and the social sector—to support the development of the CFMS which our members stand ready to partner in making this happen,” concluded Kenneth E. Bentsen, Jr., CEO of GFMA and president and CEO of SIFMA. -End- GFMA represents the common interests of the world’s leading financial and capital market participants to provide a collective voice on matters that support global capital markets. It also advocates on policies to address risks that have no borders, regional market developments that impact global capital markets, and policies that promote efficient cross-border capital flows to end users. GFMA efficiently connects savers and borrowers, thereby benefiting broader global economic growth. The Association for Financial Markets in Europe (AFME) located in London, Brussels, and Frankfurt; the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong; and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian and North American members of GFMA. GFMA Media Contacts: Evan Grogan, +1 (212) 313-1134, [email protected] Patricia Gondim, +44 (0)7552 992 530, [email protected] Corliss Ruggles, +852 9359 6996, [email protected]
AFME and PwC identify trends and challenges for European ‘investment banks of the future’
16 Nov 2020
The COVID-19 pandemic has accelerated the journey of investment banks’ technology transformation, but both consistent regulation and further investment are needed to ensure banks in Europe can deploy competitive technology, according to a report published today (16th November) by the Association for Financial Markets in Europe (AFME) and PwC. The Technology and Innovation in Europe’s Capital Markets report surveyed the largest investment banks in Europe to assess their technological progress over the past two years. Findings reveal that banks have accelerated adoption of emerging technologies and new ways of working. However, insufficient IT investment, complex legacy systems and increasing regulatory requirements, remain some of the key barriers for further progress. Among the key findings from the report: 50% of respondents believe that investment allocated to technology transformation is sufficient, up from 28% in 2018. 63% of investment banks are now implementing cloud computing, up from 33% in 2018. However, only 17% of respondents believe the benefits of new technologies are being realised across their organisation. 61% of investment banks see operational resilience as one of the top priorities for their technology transformation. 90% of respondents believe the COVID-19 pandemic will be a catalyst for future technology and operations change. James Kemp, AFME’s Managing Director, said: “Capital markets demonstrated significant resilience through the COVID-19 pandemic, adjusting to extensive remote working and high market volatility without major disruption. Innovation is crucial for banks to continue serving their clients, though it’s clear that the emerging regulatory framework also needs to adapt to support, not limit, innovation at this critical period of change. “New regulatory initiatives need to remain technology-agnostic, risk and principles based, globally consistent, and follow the principle of ‘same activity, same risk, same regulation’. This will allow the industry to continue harnessing the benefits of new technologies whilst minimising risks.” Mark Leaver, Partner at PwC, said: “The capital markets industry in the UK and Europe is at a critical juncture with continued pressure on revenues and costs, and the opportunity that technology provides. Since our initial report was published in 2018, progress has been made in areas such as cloud computing, and the response to the pandemic has demonstrated the resilience of operations and systems. However, it is clear that much work remains. “The industry needs to step up its commitment to automation, technology simplification and leveraging the opportunities of new technology. Culture change, collaboration and building new ecosystems will be critical to meet the pace of adoption required. Regulators will play a part here as a new framework emerges that will help shape the industry over the coming years.” The report predicts a shift to a longer-term transformation strategy across the investment banking industry. AFME and PwC have identified five calls to action which the industry should adopt in the next two-three years. These are: Prioritise investment in a long-term and clear change agenda Accelerate the convergence of business and IT capabilities for increased agility Create an incentive structure for investment banks and third parties to collaborate Build an organisational culture for innovation Ensure collaboration for a new regulatory framework – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747 Notes: The first report in 2018 can be found here. Key findings from this year’s report include: The report surveyed the largest investment banks in Europe to assess their technological progress over the past two years. It comes against a backdrop of new regulatory requirements emerging in the areas of technology and resilience – such as the extensive EU September 2020 digital package focused on crypto-assets, digital operational resilience, data and artificial intelligence (AI) – and the ongoing pandemic. The four key technologies identified in our first 2018 report - artificial intelligence, cloud computing, data & analytics, and distributed ledger technology (DLT) - continue to drive change across bank functions, the workforce, and engagement with third parties. However, levels of adoption vary, and only 17% of respondents to our survey believed that the benefits of these new technologies were now being realised across their organisation. There has been significant increase in the adoption of cloud computing which is now viewed as a foundational component for investment banks technology transformation; 63% of investment banks surveyed are now progressing implementations rather than pilots (against 33% in 2018).
AFME report tracks European capital markets performance in 2020
28 Oct 2020
Press releaseavailable inEnglish,French,German,Italian,Spanish. Individual country analysis available for France, Germany, Italy, Spain. Unprecedented levels of capital markets funding supported businesses in the first semester of 2020 Bond issuance has increased, with growth of social bonds consolidating Europe’s ESG leadership However, an undersized equities market means SMEs continue to rely on bank loans, restricting their opportunities to grow Securitisation volumes continued to fall, limiting bank’s capacity to expand their lending Capital markets union needed more than ever to support long term recovery European capital markets provided record amounts of funding to support businesses and economies in 2020, but lack of progress on the Capital Markets Union could hold back Europe’s economic recovery, according to a report published today (28th October) by the Association of Financial Markets in Europe in collaboration with 10 other European and international organisations. The third edition of the “Capital Markets Union Key Performance Indicators” report tracks how individual member states have progressed on key metrics such as access to finance, levels of bank lending, transition to sustainable finance and a supportive fintech environment. Adam Farkas, Chief Executive of AFME, said: “Our report demonstrates that despite the economic shock from the covid-19 pandemic, European capital markets were resilient in 2020 with unprecedented levels of bond market issuance including continuing leadership in sustainable bonds.. However, a dramatic increase in bank loans means that Europe remains highly dependent on bank lending. Equally, while member states have taken steps to foster innovation in their economies, investment in fintech companies is still below that of other major regions such as the US and China. If Europe is to achieve a strong economic recovery and ensure that it is globally competitive, further progress needs to be made in this e and other areas to strengthen its capital markets. “More broadly, these findings highlight the necessity for urgent action to encourage deep and extensive European capital markets capable of meeting the needs of borrowers and savers and thereby , f promoting long-term economic growth. This requires policy support for the means to re-equitise businesses and to improve the functioning of securitisation, among other areas of work. We are pleased to see the Commission taking action and urge policymakers to seize the opportunity to work towards a fully-fledged and globally-competitive Capital Markets Union.” Key findings show that in the past 12 months, including the six months since the start of the pandemic, the EU has seen: Unprecedented levels of capital markets funding: funding from capital markets instruments, predominantly fixed income securities, increased by 44% YoY. This has resulted in an increase in the proportion of market finance for EU businesses from 11% in 2019 to 14.5%. Securitisation remains subdued: Covered bond issuance has increased 82% YoY (predominantly of retained covered bonds) driven by the large increase in new lending stemming from the COVID-19 pandemic and the ongoing central bank support for this product. Securitisation volumes have fallen year-on-year since the onset of the STS regime. Loan Portfolio sales have fallen steadily since the peak volume of EUR 182.5bn was recorded in 2018 to EUR 28.7 bn during the first half of 2020 as banks continue to shed NPLs from their balance sheets. Growth of social bonds consolidates Europe’s ESG leadership: Throughout H1 2020, nearly one third (27%) of sustainable bond issuance in Europe was categorised as social, the largest proportion of the sustainable market in any half year to date. SMEs continue to rely on bank loans: Bank lending to EU27 SMEs totalled EUR 573bn in H1 2020 compared with only EUR14.1 bn in risk capital investment (venture capital, private equity, business angel and equity crowdfunding). Record increase in personal savings: European households have increased their savings rate to record levels at 16% of their disposable income in 1Q 2020 (vs. 12% in 2019). However, most of those savings have been predominantly invested into low-yield bank deposits. Progress on fintech, but EU still lagging behind: Seven European countries launched fintech innovation hubs over the last year. However, investment into EU27 fintech companies during the first half of 2020 (EUR 1.5bn) continues below that of other major regions like the US (EUR 7.4bn) and the UK (EUR 2.1bn) European integration remains resilient: compared to the 2008 financial crisis, in 2020 there have been no signs of significant deterioration of European integration. The COVID-19 crisis has not significantly disrupted the intra-European cross-border funding flows, with companies seeking to raise finance within Europe to navigate the pandemic. Bond issuance marketed within Europe increased to 96% in 2020 vs. 93% in 2019 and 60% in 2007. Integration with the rest of the world slightly deteriorated in H1 2020. The report was authored by AFME with the support of the Climate Bonds Initiative (CBI), as well as European trade associations representing: business angels (BAE, EBAN), fund and asset management (EFAMA), crowdfunding (ECN), retail and institutional investors (European Investors), stock exchanges (FESE), venture capital and private equity (Invest Europe), private credit and direct lending (ACC) and pension funds (Pensions Europe). – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747
AFME: now it’s time to deliver on the Capital Markets Union
24 Sep 2020
AFME has welcomed the publication of the European Commission’s Capital Markets Union Action Plan published today, 24rd September. Pablo Portugal, Managing Director for Advocacy, said: “The combined challenges of Covid-19, Brexit and the green and digital transitions mean the Capital Markets Union project has never been more urgent. Now, more than ever, we need strong, efficient capital markets that can promote long-term economic growth, support financial resilience and strengthen the EU’s competitiveness on the global stage. Policymakers must seize the opportunity to work towards a fully-fledged and globally-competitive CMU.” “A successful delivery of the Action Plan initiatives will require a strong commitment to EU integration and high-quality regulation that contributes to deepening capital markets and improving end-user outcomes. While all initiatives must be pursued with ambition and without delay, we emphasise the urgency of measures to support long-term investment, promote re-equitisation and improve the functioning of securitisation.” AFME strongly supports the following policy recommendations contained in the report: Promoting investment and a re-equitisation of Europe’s economy: We welcome the commitment to seek to provide an appropriate prudential treatment of long-term SME equity investments by banks, as well as a pledge to assess possibilities to promote market-making activities. A review and simplification of listing rules, particularly for SMEs, should be prioritised on the basis of careful analysis. Enhancing efficiency, connectivity and competitiveness in securities markets: Authorities must redouble efforts to deliver on the introduction of a common EU-wide system for withholding tax relief at source and the establishment of an EU-wide definition of “shareholder”, as well as increased convergence of non-bank insolvency law, to improve legal and operational consistency and tackle long-standing barriers. It is encouraging that the Commission intends to take forward the establishment of an effective post-trade consolidated tape for equity instruments, a project with the potential to democratise access to European markets. The wider MiFID 2/R review will be fundamental to further promote a diverse and well-regulated capital market that supports the needs of investors and consumers. Restoring a well-functioning European securitisation market: It is now more important than ever to support high-quality securitisation and deliver a more proportionate framework aligned with comparable fixed income investments. – Ends – AFME Contacts Patricia Gondim Interim Head of Media Relations [email protected] +44 (0)20 3828 2747