Surveillance has increasingly been in the regulatory spotlight as a result of high-profile enforcement actions. Firms face a multitude of challenges relating to the differing data standards across trade and communications surveillance, which creates inconsistencies across the industry of ensuring effective surveillance. Firms also experience difficulties in collecting complete and timely data across trade and communications surveillance. Without complete, accurate and timely data, firms are unable to run an effective surveillance control, which limits their ability to detect forms of market abuse. This paper outlines key considerations for how firms can improve their data quality, data ownership and data governance standards, as well as highlighting the critical data elements required to detect behaviours and as a result develop robust data governance frameworks. This paper provides a set of best practice approaches for managing surveillance data to help drive better quality standards across the industry and increase the effectiveness of surveillance processes.

The 2024 Annual Review, "Developing European Capital Markets in a Period of Geopolitical Changes", reflects AFME's efforts and achievements over the past year, which has been marked by political and regulatory changes. AFME has continued to drive forward policies that enhance market stability, support economic growth, and protect investor confidence. By leveraging our technical expertise, thought leadership, and strong relationships in both the EU and UK, AFME has led discussions on critical issues. Building on our long-standing relationships, we will continue to collaborate with policymakers to address challenges that will define the future of our industry.

AFME is pleased to announce the release of the latest edition of the European Primary Dealers Handbook. This comprehensive resource is designed to serve as a critical reference for participants in the European government bond markets, including dealers, brokers, debt management offices (DMOs), investors, and policymakers as well as journalists and academics. The Primary Dealers Handbook provides an in-depth overview of the infrastructure and organisation of both the primary and secondary government bond markets across 20 European countries as well as the European Stability Mechanism (ESM). It outlines the organisation of the primary dealer systems in each country and the essential roles of primary dealers who provide liquidity and stability in these markets. The updated edition features revised content that reflects the most recent developments in market structures, regulatory frameworks, and policies affecting the European debt markets. Since its initial publication in 2008, the Handbook has been widely regarded as an invaluable tool for market participants and stakeholders. "We are committed to providing the most relevant and comprehensive information to those interested in the European government bond markets," said Victoria Webster, Managing Director at AFME. "This update to the Primary Dealers Handbook aims to provide market participants access to essential knowledge to navigate the evolving landscape of European debt markets." The new edition of the European Primary Dealers Handbook is available for download from the AFME website. For more information and to subscribe for updates, please visit AFME's website.

The last years have seen significant acceleration in the development of DLT-based capital markets, with an uptake in DLT-based bond issuances, increasing evidence of demonstrated liquidity, and benefits throughout the security lifecycle. International and European SSA and government bond issuers have led this charge, and the market ecosystem is growing with an increasing number of investors, issuers, and other market participants adopting DLT. In this context, AFME encourages European SSA issuers to seize the opportunities of leading and shaping the capital market transformation towards DLT. In parallel, policymakers play an equally important role in ensuring that the regulatory framework fully supports the deployment of DLT in the financial sector by addressing outstanding blockers across the security lifecycle and providing digital cash solutions. This Policy Roadmap sets out an 8-point plan focusing on specific policy and regulatory changes that are necessary to enable that development and growth of DLT-based capital markets, with a focus on 1) updating the sandbox regimes in line with market momentum and 2) introducing a definitive permanent framework for DLT-based securities to maximise their economic functions, attractiveness to investors and technological benefit. The Policy Roadmap is to be read jointly with AFME’s separate recommendations for issuers (‘Issuer Roadmap’), which was published in June 2024.

The last years have seen significant acceleration in the development of DLT-based capital markets, with an uptake in DLT-based bond issuances, increasing evidence of demonstrated liquidity, and benefits throughout the security lifecycle. International and European SSA and government bond issuers have led this charge, and the market ecosystem is growing with an increasing number of investors, issuers, and other market participants adopting DLT. In this context, AFME encourages European SSA issuers to seize the opportunities of leading and shaping the capital market transformation towards DLT. In parallel, policymakers play an equally important role in ensuring that the regulatory framework fully supports the deployment of DLT in the financial sector by addressing outstanding blockers across the security lifecycle and providing digital cash solutions. This Policy Roadmap sets out an 8-point plan focusing on specific policy and regulatory changes that are necessary to enable that development and growth of DLT-based capital markets, with a focus on 1) updating the sandbox regimes in line with market momentum and 2) introducing a definitive permanent framework for DLT-based securities to maximise their economic functions, attractiveness to investors and technological benefit. The Policy Roadmap is to be read jointly with AFME’s separate recommendations for issuers (‘Issuer Roadmap’), which was published in June 2024.

The Association for Financial Markets in Europe (AFME) today published a report titled “Digital Finance in the EU – Priorities for fostering resilient, innovative and competitive financial markets”, presenting its recommendations for supporting the development of capital markets and increased access to finance for the real economy through new technologies. The report focuses on the following main areas: Unlocking the benefits of tokenisation and DLT technologies in capital markets: AFME highlights how the development of Distributed Ledger Technology (“DLT”) holds promise for unlocking efficiencies and driving growth. Payments, settlement, and securities lifecycle events may be carried out with greater safety and more efficiency; access to capital markets, through tokenised securities/assets, may be expanded to a broader set of participants. At scale, these developments would benefit the real economy. Supporting an effective data ecosystem: The EU’s proposed Financial Data Access (FiDA) framework, if designed correctly, has the potential to enhance the way banks operate, encourage innovation (including across sectors, if some provisions are met) and support a more effective and efficient data ecosystem. However, a clearer definition of the scope, stronger safeguards to ensure a level playing field and a gradual implementation are key preconditions for a workable framework. Promoting a secure and resilient EU digital finance sector: Work to ensure a successful and proportionate implementation of DORA will remain central in the coming months. Leveraging the opportunities from the use of artificial intelligence (AI): AI has the potential to transform financial services and capital markets, to make them safer, more efficient, accessible, and better tailored to consumer needs. At the same time, these opportunities require careful consideration of new risks and challenges introduced by a growing use of AI. Commenting on the report, Stefano Mazzocchi, Managing Director, Advocacy at AFME, said: “Banks have been at the centre of a profound digital transformation, a process which will continue and accelerate in the coming years. As the EU begins a new policy cycle, digitalisation of finance has the potential to support the development of capital markets. By increasing efficiency, lowering costs, boosting transparency and availability of information and allowing greater access to data, digital technologies can support the CMU project and allow greater access to capital markets both for entrepreneurs and institutions looking for funding, and generate returns for investors. With its digital finance strategy, the EU has been an early mover in this area and we look forward to continuing engagement and dialogue with all stakeholders to facilitate digital innovation”.

AFME and Linklaters have today published a new report titled 'Climate transition plans: current and emerging frameworks for the European financial services sector.’ The report is an essential primer on transition plan frameworks and guidance relevant to European banks covering international standards and developments in the UK and EU. The report also discusses trends in litigation, NGO and shareholder scrutiny related to disclosures in climate transition plans. It aims to provide a helpful reference point for navigating the increasing number of transition plan frameworks applicable to banks, covering not only the content of each of the frameworks but also their legislative timeline.

AFME is pleased to publish its new report titled ‘Scaling up and integrating EU capital markets’, outlining its vision and recommendations on the future of EU capital markets. In the report, AFME calls for a revigorated CMU which can be achieved by focussing on: increasing market liquidity, relaunching the EU securitisation market and modernising theregulatory and supervisory ecosystem. After a decade which has seen multiple initiatives put forward under two iterations of Capital Markets Union Action Plans, the role and capacity of the EU’s capital markets has unfortunately not changed substantially. An integrated and liquid European capital market is an essential element of the EU’s future competitiveness on a global stage. AFME strongly supports the fresh political momentum to advance CMU and encourages the Commission and the co-legislators to define and agree on a set of transformative measures as the time has come to deliver changes in practice.

While DLT is being adopted in different parts of capital markets, this roadmap focuses on adoption of DLT in markets for bonds issued by European sovereigns, supranational institutions and public-sector agencies. For further details, please see the following parts of the roadmap document: Part 1 – Benefits and Challenges of using DLT in Bond Markets setting out how DLT can help issuers achieve their issuance and policy objectives. Part 2 – State of the DLT-based bond markets showing the growth in DLT-based bond markets. Part 3 – DLT vs Traditional Bond Trade Lifecycle comparing the bond lifecycle in a DLT architecture to that using traditional infrastructures. Part 4 – Prerequisites and Enablers for Scaling setting out the key enablers for scaling of DLT-based SSA and government bond markets and the degree to which these are in place. Part 5 – Issuer Roadmap setting out a strategy for issuers to enter the DLT-based bond market, following 3 phases: Phase 1 - Experimentation with early-stage DLT-based issuances; Phase 2 - Scaling of DLT-based SSA and government bonds; and Phase 3 - Regular issuances in mature DLT-based markets. The Issuer Roadmap is to be read jointly with AFME’s separate recommendations for policymakers and regulators (‘Policymaker Roadmap’) to complement and enable DLT-based capital market developments, which will be published in August 2024.'

This paper looks to provide an overview of the development and objectives of the T2S project in Europe and to assess its effectiveness with regards to the enhancement of settlement efficiency, harmonisation and cost reduction in post trade processes, along with fostering cross-border investments within the European Union. TARGET2-Securities (T2S) is a single pan-European technical platform which allows for the settlement of securities transactions in central bank money, in real-time, for the same cost, and following the same harmonised procedures, even on settlement transactions involving different CSDs. T2S uses an integrated settlement model, whereby the securities and cash accounts used for settlement are located on the T2S platform, ensuring delivery-versus-payment (DvP) settlement by effecting simultaneous bookings on the securities accounts (provided by central securities depositories) and on the central bank money cash accounts (provided by central banks).