The French financial markets authority (Autorité des marchés financiers, AMF) recently published its annual report, which considers its actions during the pandemic - such as the use, for the first time, of its power to ban net short positions (see our previous FinBrief here). The AMF annual report also identifies various key areas for economic recovery.
In 2020 stock market transactions by individuals in France reached 60 million, a 35 million increase year-to year. Hence, the AMF pointed out that it had become essential to ensure a safe framework, limiting excessive risk-taking for instance. To that end, the AMF conducted a series of inspections summarized in a publication dated March 2021. Those short thematic inspections focused on the suitability of the products recommended to clients based on their profile.
Defending market integrity and ensuring shareholder dialogue were top priorities for the AMF, as they appear essential to achieve transparency - especially in relation with listed companies - and prevent market abuse. In addition, the AMF participated in the adaptation of rules on annual general meetings, which were greatly impacted by the pandemic. In this context, it published recommendations on that topic in which it was openly supportive of live electronic voting in annual general meetings. However, certain French issuers showed reluctances to this prospect, unlike other European issuers.
The development and support of sustainable finance remained a top priority for the AMF, in spite of the pandemic. On this topic, some of its measures included the publication of a first doctrine on the marketing of collective investment products incorporating non-financial approaches to avoid greenwashing, as well as the drafting of the first report on the monitoring and evaluation of the climate commitments, conjointly with the French banking authority (Autorité de contrôle prudentiel et de résolution, the ACPR). The AMF was also involved at the European level, contributing to consultations on several matters including its renewed sustainable finance strategy. The AMF's involvement in sustainable finance is expected to keep growing as new European regulations apply from this year, such as the regulation (EU) 2019/2088 of 27 November 2019 on sustainability and related disclosures in the financial services sector (SFDR) and the Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (Taxonomy).
The upcoming French Presidency of the Council of the European Union (EU) in 2022 will bring the enhancement of the financial sovereignty of the EU at the center of the AMF's priorities. While the Capital Markets Union is stagnating, the European Commission presented in September 2020 an action plan aiming at fostering the access of companies to market financing, promoting European investors' access to secure long-term products, and closer integration of the 27 national markets of the European single market.