With the publication of its 2021 annual report, the AMF reviews its five-year strategic plan, #Supervision2022

The AMF has reviewed the actions taken in 2021 to ensure investor protection as well as the smooth operation of financial markets, and assessed them in light of the strategic orientations set for 2018-2022. As this strategic cycle draws to a close in an economic context hard hit by the conflict in Ukraine, the AMF Chairman outlines the main challenges ahead for financial market supervision and regulation in France and Europe.

Review of a busy year in 2021

For listed companies, 2021 was a year of intense activity for initial public offerings, with 45 operations, resulting in an increase in the number of companies listed on Euronext and Euronext Growth. The number of takeover bids, which the AMF must review for regulatory compliance, also rose sharply, with 43 compliance decisions given. These trends have continued at a slower pace in the first half of 2022. At the same time, to assist companies in the run-up to important regulatory deadlines, the AMF conducted an overview of the carbon reporting of companies to highlight best practices.

With regard to the supervision of asset management companies and savings products, some of the provisions of the Sustainable Finance Disclosure Directive (SFDR) came into force in 2021 and professionals prepared for the implementation of the Taxonomy Regulation. The AMF continued its efforts to get asset managers to adopt the various optional liquidity management tools, and launched a public consultation on the subject at the beginning of the year. It also undertook extensive work on investor fees, which should produce regulatory changes in the future.

Market supervision, investigations and inspections in 2021
119 billion lines of data entered on the market supervision platform
1280 reports on suspicious transactions
44 investigations undertaken in 2021, 37 completed
51 inspections undertaken, 47 inspection reports sent.

In the field of digital finance, the AMF, in conjunction with the Autorité de Contrôle Prudentiel et de Résolution (ACPR), registered 21 digital asset service providers in 2021. By mid-May, it had registered 37 digital asset service providers. Registration is only the first step towards authorisation, which is currently optional, but will become mandatory under the future European regime, thereby enabling supervision of providers who will then be able to offer their services across the EU.

The AMF continued its efforts to inform, educate and warn investors through its AMF-Epargne Info Services plateform, through educational content and warnings on its website, through regular communication on social networks, in particular, with its new Instagram account, and through its new scam prevention campaign launched in December 2021. To ensure that the market is adapted to the needs and profile of retail investors, it continued its work with the ACPR on the online process for the subscription of financial products. A module on sustainable finance has been operational since January 2022 as part of the verification of the skills and knowledge of professionals, including sales personnel.

Settlements and sanctions in 2021
9 settlements approved. The total amount due under these agreements is over 1 million euros.
19 decisions published, 34 persons were sanctioned, 29 persons were imposed financial penalties ranging from 20,000 euros to 25 million euros for a total amount of more than 61 million euros.

The AMF in a process of transformation

With 2022 being the final year of the #Supervision2022 strategic plan, in its annual report the AMF assessed the progress made so far and what remains to be done in the four priority areas identified at the beginning of 2018:

commit to a strong, integrated and internationally competitive 27-member EU;
develop supervision and its means of intervention;
support market participants, foster innovation and enhance the attractiveness of the markets and the French financial centre;
transform towards a modernised, more open and agile AMF.

More directly, the AMF is now equipped to develop new uses of data for supervisory purposes. It will continue to deploy its supervision through projects developed from the ICY supervision platform, which is based on Big Data technologies, particularly in the asset management field. It has already achieved initial results by reducing processing times for its enforcement activities. Lastly, the AMF's new supervisory approach, which relies partly on short, thematic inspections (Operational and Thematic Supervision of Practices or SPOTs) to identify good and bad practices with a view to improving the performance of all players, is well understood. In all, some 160 institutions have undergone SPOT inspections since 2018.

The challenges ahead

During the presentation of the annual report to the press, AMF Chairman Robert Ophèle highlighted the AMF's priorities in the current economic climate, marked by the conflict in Ukraine:

Harness the savings of French retail investors towards the financing of the equity capital of companies;
Increase the clarity and credibility of sustainable investment;
Reinforce the European regulatory framework.

Three major challenges will have to be met in the next few years:

Asset management: "France's leading position in asset management, a market segment whose systemic importance is now established, and the complexity of the division of responsibilities between authorities mean that the French supervisory authority must continue to gain in strength and a genuine European approach to the sector must emerge," he said. In the short term, the AMF will continue its programme to digitise processing and interactions with asset management companies and custodians and to use data to better identify risk areas;
Sustainable finance: "The second challenge is to make sustainable finance efficient and useful for financing the transition, make it relevant but without being overly complex," stressed Robert Ophèle. The main issue here will be the proper implementation of the new non-financial reporting standards, and the AMF will support companies in this new phase;
Digital finance: the adoption of a pilot exemption regime for market infrastructures wishing to use distributed ledger techniques and the expected adoption of the Markets in Crypto-Assets (MiCA) Regulation should enable the emergence of a uniform approach to digital asset activities in the single market. "This is all the more necessary since the French regime for registering DASPs is revealing its limits and the experiments conducted on the use of blockchain to carry out financial transactions have proved promising”, explained Robert Ophèle. Regarding the digitisation of the cross-border marketing of financial products, the AMF Chairman called on the ESMA to take on greater responsibility, as the current supervisory system left little scope for the supervisory authority of the country in which the products were marketed.

About the AMF

The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets. Visit our website https://www.amf-france.org