Association Française des Professionnels des Titres
AFTI
L’AFTI, association de la Place de Paris, représente les métiers du post-marché et fédère les compétences au sein de l’industrie financière par ses groupes de travail et observatoires. L’AFTI rassemble des banques, des entreprises d’investissement, des infrastructures de marché, des émetteurs, ainsi que des associations professionnelles et des sociétés de conseil. Elle conduit une action largement tournée vers l’Europe et l’intégration en cours du marché européen des capitaux. Elle entretient des liens étroits avec le monde de l’éducation via certaines universités (Paris Descartes, Paris Ouest, Lumière Lyon II et GOMFI, Caen, Cergy) et écoles (ISC Paris) où elle facilite l’ouverture de filières professionnelles.
ID: 344174218621-09
Lobbying Activity
Response to Central securities depositories – review of EU rules
2 Apr 2021
AFTI members’ main concerns are the following:
- Cross-border provision of services
While from a global perspective, CSDR did encourage cross border developments and services by CSDs, CSDR itself is not sufficient to create complete harmonization and we have witnessed an increase of the overall post-trade costs. It is important from our perspective that the additional costs envisaged by the Commission to support the provision of services across the EU be borne primarily by CSDs.
- Internalised settlement
The financial industry has undertaken important investments in order to develop internalised settlement reports. We are of the opinion that stability of the rules is to be sought in the short to medium term although this position does not preclude to continue to work on achieving more consistency in the interpretations of the reported figures with the regulator and improve reporting rules in the long term. We do not see benefits to the introduction of thresholds for reporting purposes as it would only bring operational complexities. We are also opposed to the introduction of thresholds at national level which could be creating potential disparities within the EU and weaken harmonization of the rules.
- Technological Innovation
We are of the opinion that in general terms, technology should not influence the regulation. Some Member States have considered CSDR book-entry requirements to be compatible with security tokens even though some adjustments may prove necessary. We believe this discussion should take place within the DLT pilot regime, which is an appropriate instrument to provide relevant exceptions where necessary to pursue its exploratory scope.
- Banking-type ancillary services
We believe that in order to provide banking-type ancillary services, CSDs need to be subject to the same obligations (prudential requirements, etc.) in order to operate under the same rules as banking institutions and to guarantee a level playing field. CSDs, considering their critical role as central market infrastructures, should remain adequately protected from any additional risks such as credit risks or market risks that are normally associated with the provision of banking services.
- Settlement discipline
As AFTI detailed in its answer to the consultation, the settlement discipline regime is the component of CSDR for which the need for change is the most critical. Admittedly, it has not entered into force yet. However, we already know that the current design, especially for the mandatory buy-in requirement, will create fundamental issues and have severe impacts on the market.
The current regime has two main characteristics:
A strict and constrained framework which forces the end buyer to accept cash instead of the expected securities should the buy-in be unsuccessful and prevents it from using other existing mechanisms (such as ICMA rules or buyer protection) which are well-admitted also outside Europe
A systematic application that will lead to pointless and/or irrational purchases both because a single lack of stock will most likely trigger several buy-ins and because the current scope includes all types of transactions thus submitting to the mandatory buy-in portfolio transfers, realignments, collateral movements, primary market related transactions or even the buy-in itself.
Whereas the mandatory buy-in is fully appropriate for CCPs (they have a systemic importance and are not the end buyer), non-CCP transactions should be handled under a voluntary buy-in allowing the buyer to decide the best time to initiate the process. With a logical scope of transactions and a recognition of existing alternatives, we are fully convinced that a discretionary buy-in combined with the new penalty regime will permit to reach the objectives of the regulation without negative consequences.
Please refer to the attached file for the conclusion.
Read full responseResponse to Safekeeping duties of depositaries for Alternative Investment Funds
25 Jun 2018
We understand that this proposal of amending delegated regulation only takes into account the point relating to the assets segregation of the ESMA’s opinion of 20 July 2017 on Asset segregation and application of depositary delegation rules to CSDs, and that the point of the ESMA’s opinion relating to the depositary delegation rules to CSDs will be taken into account at a later stage, as far as the clarifications relating to the depositary delegation rules to CSD require amendments to Directive 2011/61/UE (Level 1), which may not be incorporated in this amending delegated regulation (Level 2).
Read full responseResponse to Safekeeping duties of depositaries for UCITS funds
25 Jun 2018
We understand that this proposal of amending delegated regulation only takes into account the point relating to the assets segregation of the ESMA’s opinion of 20 July 2017 on Asset segregation and application of depositary delegation rules to CSDs, and that the point of the ESMA’s opinion relating to the depositary delegation rules to CSDs will be taken into account at a later stage, as far as the clarifications relating to the depositary delegation rules to CSD require amendments to Directive 2011/61/UE (Level 1), which may not be incorporated in this amending delegated regulation (Level 2).
Read full response7 May 2018
AFTI welcomes the opportunity to share our views on the draft Implementing Regulation (IR) issued by the European Commission on shareholder identification, the transmission of information and the facilitation of the exercise of shareholders rights published on 11 April 2018.
AFTI is the leading association representing the post-trade business in France and Europe.
AFTI represents through its 83 members a wide range of activities: market infrastructures, custodians, account-keepers and depositaries, issuer services, reporting and data management services, with a total staff of 28,000 in Europe of which 16,000 in France.
Our members acting as financial intermediaries account for 26% of the European market.
2. General remarks
Positive elements :
o Chosen legal form
The chosen legal form of an implementing Regulation permits to reduce the risk of fragmentation amongst Member States.
o Emphasis on straight through processing
The emphasis on straight through processing including the communication by issuers or their agent (Art 2.1) will favour interoperability and STP through the entire chain of intermediaries.
o CAJWG Standards
The reference to Market Standards for Corporate Actions processing (art 8) and the acknowledgment of their efficiencies.
Negative elements :
o Deadlines :
The extremely tight deadlines by which all information is to be transferred to the shareholder and from shareholders to issuer. In certain cases they are irrelevant because they could lead to downgrade current efficient processes based on globalization of instructions before sending them before issuer deadlines.
o Minimum requirement :
The fact that the text is a minimum requirement that could lead to local gold plating application introducing divergences in the implementation of this IR.
Needs for further information or clarification:
o Paper and electronic based exchanges:
The current draft of IR should clarify that it applies to electronic means of exchanges of information only. In certain cases, it may be required to provide paper-based information to shareholders. The conversion into electronic format that allows for straight-through processing this information is a time-consuming process. Therefore, for such cases, a clear exemption from the delays of transmission requirement is needed for the intermediaries to be able to comply with the regulation. Forwarding the information “without undue delay” should be sufficiently clear, while allowing for the required flexibility.
o GDPR:
IR should clarify that its provisions are consistent with GDPR ones (transmission of information through the chain of intermediaries, to the issuer,…) to avoid misinterpretation form the stakeholders. Furthermore, there are questions related to what extent processes requested by SRD II on personal data of shareholders are not in scope of GDPR.
o Information flow:
Appendix does not clearly describe the associated flow of information and the involvement of parties.
o Guidelines :
These two last needs for further information could be met via guidelines to be published.
o Multiple ISIN messages:
The good practice would be to have one ISIN per message. The aggregation should be at issuer or its agent level.
o Message format:
The identifier messages are still to be qualified in terms of format and terms of communication. The MT567 could be an example to work with in terms of information needs. More globally, it would be helpful to have a flows description with the status for any rejections.
Read full response