The Association for Financial Markets in Europe (AFME) has today published model clauses for the contractual recognition of bail-in for the purposes of satisfying the requirements of Article 55 of the EU Bank Recovery and Resolution Directive (BRRD). The model clauses seek to support cross-border effectiveness of resolution and assist banks with complying with the requirements of Article 55 BRRD by providing model wording for inclusion in debt instruments and other contracts. Commenting on the publication of the model clauses, Oliver Moullin, Head of Recovery & Resolution and General Counsel at AFME, said: “AFME’s model clauses for the contractual recognition of bail-in should support cross-border effectiveness of resolution and assist banks in meeting the requirements of Article 55 BRRD. However, very significant challenges remain and the scope of Article 55 should be amended to align it with the international standard, increasing consistency and clarity for the market.” Continued concerns with the scope of Article 55 BRRD The scope of Article 55 is very broad and requires banks to include contractual recognition clauses in contracts giving rise to all liabilities governed by non-EEA law, save where these are expressly excluded from bail-in under the BRRD. The requirement gives rise to significant challenges, for example where banks are unable to unilaterally amend contracts, such as in relation to trade finance and membership of financial markets infrastructure.A number of authorities have acknowledged that in many cases inserting such a clause is impracticable. While several authorities have sought to adopt a pragmatic approach to implementation, there remains uncertainty and potential inconsistency in application. A clear and consistent approach across the European Union is required to provide banks and counterparties with a clear and workable solution. AFME believes that the scope of Article 55 should be amended to align it with that agreed at the international level through the Financial Stability Board (FSB). These principles propose that the scope should cover instruments eligible for loss absorbing capacity requirements and any other “debt instruments”. This would provide a much clearer scope of liabilities and significantly reduce the impact on firms while meeting the objective of ensuring resolvability. Alignment with the FSB principles is particularly important where inconsistencies in approach could severely impact the competitiveness of European banks operating in global markets. – Ends –

Commenting on the launch of the first Joint EU-US Financial Regulatory Forum, Simon Lewis, Chief Executive at AFME, said: "AFME welcomes the launch of the EU-US Joint Financial Regulatory Forum which has the potential to build upon the transatlantic cooperation that the Financial Markets Regulatory Dialogue has already established. Beyond this welcome initiative, AFME recognises that more needs to be done to enhance international coordination and facilitate cross-border investment with a view to supporting the growth agenda in Europe. "We therefore believe this should be a first step towards including a framework for discussing financial regulation in the Transatlantic Trade and Investment Partnership (TTIP). TTIP offers the best opportunity for a forward-looking EU-US dialogue that can address issues early while also bringing the needed transparency and accountability that other mechanisms may lack”.

The legislative cycle after the 2014 European elections should be focused on long-term growth. As the new EuropeanCommissioners and MEPs look forward to the next five years, they have a key task – to introduce legislation that promotessustainable economic growth in Europe, so reducing unemployment and debt through improving the structure of the pan-European economy. Substantial progress has been made in establishing a framework of financial regulation that reduces the risk of the bankingsystem endangering the economy again. As that framework moves from legislation to implementation, it is time to focus onaddressing the growth agenda. The European Commission acknowledges in its ‘roadmap to meet the long-term financing needs of the European economy,that the funding model needs to be improved. Europe is too reliant on its banks for funding and needs to develop its capitalmarkets in order to improve the availability and cost of finance. As the Commission says,if long-term growth is to be improved, then companies need better access to large andliquid capital markets. This paper highlights the potential for high-quality securitisation in Europe to play apart in unlocking jobs and growth. Yet for it to do so, the proposed regulatory frameworkneeds to be sensibly calibrated – recognising risk, but also taking into account the strongperformance of high-quality securitisation in Europe over the past few years. We welcome the support of central banks and policymakers in calling for a revival ofhigh-quality securitisation, and stating that a revived and sustainable securitisationmarket would contribute to lower cost of capital, higher economic growth and a broaderdistribution of risk. In our view, there is an urgent need for coordinated action to revive securitisation. It would be a first step in helping Europe’sbanks fund their customers more efficiently. It would broaden the range of tools available to help them manage and transferrisk. And it would also help rebalance Europe’s financial system by widening and deepening its capital markets.

Commenting on the resignation of Commissioner Hill, Simon Lewis, Chief Executive of AFME, said: "Lord Hill has done an outstanding job in his time as Commissioner for Financial Stability, Financial Services and Capital Markets Union and in particular by championing the CMU project. There has been much achieved already, including the Cumulative Impact Assessment, for which he should be congratulated and we look forward to working with his successor Commissioner Dombrovskis on this important project. More than ever, given the events of the past few days, it is important that momentum towards delivering these initiatives to support economic growth and prosperity across the EU is maintained."

“The outcome of the EU Referendum and the UK’s decision to no longer continue its EU membership will shape the direction of Europe’s financial markets for years to come. “This decision will significantly affect UK-based financial services firms and their ability to serve their clients and customers across Europe."

An international group of fourteen trade associations and business groups today announced the formation ofa Transatlantic Financial Regulatory Coherence (TFRC) Coalition. The Coalition, which represents a largepart of the transatlantic financial services community, has been brought together by a strong and sharedbelief on both sides of the Atlantic that improving regulatory cooperation between the U.S. and EU must be apriority. It believes that a comprehensive Transatlantic Trade and Investment Partnership (TTIP) thatincludes both market‐opening measures and a framework for regulatory coherence in financial services isthe best way of achieving this.

The Investment Association and the Association for Financial Markets in Europe (AFME) have today paved the way for safer and better executed Algorithmic trading on Europe’s financial markets. Algorithmic trading is a key component of an investor’s ability to get the best price and execution for their clients. Therefore, it is vital that there is fair and accurate sharing of information between both sides about how any given algorithm operates - most notably between the investors and their broker/dealers. The industry has come together to proactively create this open framework, ahead of MiFID II, which supports Buy and Sell side in meeting their regulatory obligations. To ensure that there is a consistent methodology of how information is shared between each side of an electronic equity transaction, the Associations have created standardised questionnaires that outline the level of detail investors and broker/dealers will provide each other ahead of an electronic transaction taking place. The framework includes technical standards that a platform should meet in order to automate and facilitate the consistent sharing of information. The Associations are now calling on data vendors and suppliers to put forward their proposals to set up platforms that meet these Criteria. The Associations will not endorse or restrict their members to use any particular vendors’ platform. The framework for the Platform can be viewed here. - ENDS -

The Association for Financial Markets in Europe (AFME), FIA,the International Capital Market Association (ICMA), the International Swaps and Derivatives Association, Inc. (ISDA) and the International Securities Lending Association (ISLA) have jointly published a statement that can be used to help market participants comply with new requirements under the European Union’s Securities Financing Transaction Regulation (SFTR). The SFTR rules come into force from July 13, 2016, and will affect all existing and future title transfer and security collateral arrangements under a variety of financial agreements. Under the SFTR, all parties that accept collateral are obliged to inform their counterparties of the risks involved in entering a title transfer arrangement or granting a right to reuse collateral under a security arrangement. The SFTR Information Statement is the result of a collaborative effort by AFME, FIA, ICMA, ISDA and ISLA, and has been drawn up to inform market participants of the general risks and consequences that may be involved in consenting to a right of use of collateral provided under a security collateral arrangement or of concluding a title transfer collateral arrangement. Market participants can tailor the statement to suit their own specific circumstances. - ENDS-

Commenting on the FCA’s investment and corporate banking market study interim report and a Discussion Paper on the IPO Process, Simon Lewis, Chief Executive of the Association for Financial Markets in Europe (AFME), said: “We continue to support the FCA's efforts to encourage competition in financial services to the benefit of the consumer and with a view to maintaining liquidity and growth across the single market. We note the proposed measures set out by the FCA and, in particular, we welcome the proposal to consider changes to the IPO process in relation to the publication of independent research. We look forward to participating in the consultation process that will follow the publication of the report.” – Ends –

AFME’s High Yield division has today updated many of its standard forms to help establish good practice for the industry. The documents were updated as part of AFME’s general review of its standard documentation, and following buy- and sell-side discussions among AFME’s High Yield members, in a wider effort to maintain and improve business practices in the European high yield market. Gary Simmons, Managing Director of AFME’s High Yield Division, said: "It is important that the changes made in our standard forms are adopted on an industry-wide basis to promote best practice in the high-yield bond market. A number of stakeholders across the industry gave valuable input during the revision of these documents and we hope they will help address some of the issues brought to our attention regarding structure, disclosure and transparency." Among the revised documents are updated Disclosure Guidelines,which were last revised in December 2011. It is hoped these guidelines will help the market tackle issues such as the use of passwords and other restrictions that are seen to limit access to information about bonds on issuer websites, as well as general disclosure and transparency issues regarding deal terms and structures. Also updated are AFME’s standard forms for the Agreement Among Initial Purchasers (AAIP)– both New York and English Law versions– to reflect market developments since they were last updated (for example, the US JOBS Act and the Bank Recovery and Resolution Directive in Europe). Given that listing practices for non-investment grade debt securities can vary, AFME has also put together new Recommended Listing Practice Guidelinesto encourage industry-wide good practice in that area. AFME has also updated its boiler plate prospectus sections including: Plan of Distribution Transfer Restrictions Notice to Investors Book Entry –Option I, Option II and Option III All of the updated forms can be found on the AFME website. – Ends –