The Association for Financial Markets in Europe (AFME), in collaboration with eleven other European and international organisations, has today published the seventh edition of the “Capital Markets Union – Key Performance Indicators” report, tracking the progress of Europe’s capital markets against nine key performance indicators and analysing the progress over the past seven years. Among the key findings of the 2024 report on European capital markets’ performance: EU Capital Markets Falling Behind: Despite some cyclical gains, the EU lags behind the US, UK, and China in most key indicators, such as access to capital, global interconnectedness, and market liquidity. The EU’s capital markets remain fragmented, undermining economic competitiveness on a global scale. ESG Leadership, but Growth Slowing: The EU continues to lead in sustainable finance, with ESG bonds accounting for 13% of total bond issuance in 2024, ahead of the US and UK. However, growth in EU ESG issuance has not kept pace with growth in non-ESG issuance, with the overall share of ESG issuance down from 15% in 2021, signalling a potential plateau. Deteriorating Intra-EU Integration: The report highlights a worrying decline in financial integration within the EU, a trend also noted by the European Central Bank. This fragmentation threatens the EU's overall financial stability and its ability to compete globally. EU Securitisation Market Remains Underdeveloped: The EU securitisation market continues to trail behind those of the US, UK, and Australia. Currently, only 1.9% of outstanding EU loans are transformed into securitised vehicles or loan sales, compared to 7% in the US, 2.8% in Australia, and 2.2% in the UK. Issuers from only 9 of the 27 EU member states utilised securitisation as a source of funding in the first half of 2024. Widening Market Disparities: Northern European nations, such as Luxembourg and the Netherlands, boast deeper capital markets and greater access to finance, while countries in Eastern Europe lag behind. This disparity poses a significant challenge to the EU’s ambition for an integrated capital market. EU FinTech Ecosystem Stalling: Private investment in EU FinTech remains lower than in the US and UK, limiting the region’s progress in digital finance. However, the EU has taken a leadership position in the issuance of tokenised bonds, accounting for 20% of the global market in this emerging area.

AFME is pleased to partner with Linklaters in helping financial institutions navigate and implement regulatory requirementsas it relates to MiFIR/D II. Our publication covers key changes in secondary capital markets in both the EU and UK. We have analysed the key regulatory and implementation issues related to areas suchas market structure, transparency, market data, consolidated tape, investment research and execution of client orders. Our guide is primarily written for sell side firms operating in wholesale secondary markets, however, it may be of wider interest to other market participants.

AFME is pleased to have supported a comprehensive study highlightinga number of significant data gaps that might undermine the efficiency and integrity of fixed income markets across the UK and EU. The research was undertaken collaboratively by FINBOURNE Technology, AdamantiaAdvisory and Propellant Digital, and supported by AFME, BVI and EFAMA.

The AFME-led European T+1 Industry Task Force is pleased to share a report titled "High-level Roadmap for Adoption of T+1 in EU Securities Markets."

Since the publication of the 2021 report on Global Operating Approaches, AFME has continued to track key changes in banks’ operations functions. Our 2024 edition, the Future of Operations: Keeping Capital Markets on the Front Foot, sets out the latest findings by exploring recent advancements in operational strategy, models, governance, and technology. It offers an in-depth analysis of the strategies employed by operations leaders to transform operations from a traditional back-office role into a central component of a bank’s strategic framework and competitive advantage within Wholesale Capital Markets. In collaboration with PwC, AFME has explored current trends in operations within European capital markets to gauge their impact across: Operational objectives Strategy execution Risk management and compliance The role of technology Governance and the changing role of the COO The trends and developments outlined in the report are based on the collective expertise and experiences of industry Operations leaders obtained through survey responses from, and follow-up interviews conducted with, Chief Operating Officers (COOs) and heads of Operations from across AFME membership. In working with our members, AFME in conjunction with PwC aims to understand the links between Operations and advocacy. We hope this report serves as a helpful basis for discussions between Operations leaders and policymakers as we move into the next phase of strengthening financial markets.

This report is part of the European Benchmarking Exercise, a market-led initiative organised by AFME, EDW and TSI, and contains results from H2-2023. Its purpose is to highlight the quality and usefulness of disclosure in the European private cash securitisation market, both ABCP and balance-sheet financed, in order to assist market participants and reassure supervisors of the high standards of transparency that can be achieved in this market. CLOs, synthetic securitisations and public ABS are not in scope. It provides aggregated, transaction-level data gathered on a voluntary basis from 12 banks (BayernLB, BNP Paribas, Commerzbank, Credit Agricole, DZ Bank, Helaba, HSBC, ING, LBBW, Natixis, RBI and UniCredit) across 6 countries (Austria, France, Germany, Italy, Netherlands and the UK). The report shows that non-public securitisation markets are an important source of financing for the real economy. The overall private securitisation market is currently estimated at €231bn of total commitments, with the exercise-related dataset covering €79bn of those commitments. Private securitisations backed by trade receivables and auto loans/leases make up around 74% of the market, and if consumer loans and equipment leasing are included, the 4 asset classestogetherrepresent 88% of the market. This is the sixth in a series of such reports to be published biannually over time.

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.