Speech by Marie-Anne Barbat-Layani, AMF Chair – Publication of 2022 annual report AMF and the strategic guidelines for the period 2023-2027 – Monday 26 June 2023

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Hello everyone,

Last January, I promised to speak to you again before the summer concerning our main strategic guidelines for the period 2023-2027. So here we are! These guidelines will be the backbone guiding our choices and actions in performing our duties as an independent public authority, serving the public interest.

This plan has a powerful name reflecting its ambition: IMPACT 2027. The name we have chosen illustrates our goal to be a regulator having a strong impact, involved in both the production and roll-out of regulations. A regulator also having an impact in its supervisory practices, as well as an impact that we want to give to the action of the AMF staff.

A few words about the process

Our guidelines are the result of the work we have carried out in recent months with our teams and the Board concerning the main lessons of past years and the context in which the AMF will be working in the coming years. They have been developed by listening to all the stakeholders. This attitude of listening and interaction is important, and we want to develop it.

The context

2022 was a complex year, marked by the war in Ukraine and the resurgence of inflation, in a changing financial environment faced with new risks. Financial markets experienced high volatility and a significant downturn.

In 2023, there is confirmation of an environment marked by the end of a long period of low and even negative interest rates. Faced with inflation and rising interest rates, financial market participants and investors will have to adapt.

In this environment, debt and interest-rate and liquidity risks are becoming more important issues.

Sectoral problems have appeared:

• The UK sovereign debt market experienced a dramatic crisis in September 2022;
• The crypto-asset universe saw its first major crises, initially with Terra Luna in May 2022 and then with the bankruptcy of FTX in November 2022;
• Specific financial firms faced trouble, in particular certain US regional banks in March of this year, and Crédit Suisse.

> The responses were appropriate.

Global financial stability was not endangered, but these events showed the extent to which the vigilance and strong coordination of the regulatory authorities are necessary.

At the same time, the Paris marketplace became the leading European financial centre in terms of market capitalisation.

This is a major asset for the strategic independence of the European Union and for financing of the economy. It is also a responsibility for the regulator.

The Paris marketplace benefits from a great diversity of participants. In the field of asset management, we had 702 authorised asset management companies with a total of 1,862 billion euros in assets under management at the end of 2022. We also have major financial firms of European renown. This is proof that post-Brexit attractiveness and the choice of responsible finance and a high level of regulatory requirements are a winning strategy.

However, we note that corporate financing increasingly depends on private financing (private equity and debt), and that listing on a stock exchange has seemed less attractive in recent years.

We also note that European markets are still of modest size in relation to the European economy, and fragmented.

Looking beyond this context, two fundamental issues are becoming increasingly important: digitalisation of the financial world and sustainable finance.

Digitalisation is not something new, but it is accelerating and engendering new players, new opportunities and new practices, but also new challenges for the regulators, particularly with regard to investor protection, data protection and cybersecurity.

As regards climate urgency, this is an absolute priority, confirming the appropriateness of the AMF's pioneering position with respect to sustainable finance. Finance must contribute to the transition to a more sustainable economy. The recent summit "Pour un nouveau Pacte financier pour le climat" (new financial pact for the climate) again showed the magnitude of the financing requirements.

In this context, we have chosen six main guidelines for the period 2023-2027:

First, two cross-cutting approaches:

• [be] a demanding regulator for a leading European financial centre;
• [have] strong international action.

Then, three priority issues:

• protecting retail investors;
• promoting more sustainable finance;
• supporting innovation.

Lastly, what we have called our "essential basis": our organisation and our staff for which we have set ourselves an internal priority: [be] an attractive and efficient authority serving the public interest.

Let us go back to our first cross-cutting approach: "A demanding regulator for the leading European financial centre".

This approach is based on a conviction and a commitment.

> A conviction: that demanding regulation does not conflict with a dynamic marketplace, quite the opposite.

Market integrity and investor confidence are highly beneficial for the competitiveness of a major financial centre. The fact that the Paris marketplace has become the leading European financial centre proves this, even though France has never played the game of adopting the least stringent regulations.

The AMF will therefore position itself as a demanding regulator, to ensure that markets functions in an orderly way and that investors are properly informed.

We will keep a very diligent watch with regard to market integrity, financial and non-financial information, the protection of minority shareholders and the fight against money laundering and the financing of terrorism.

Our supervisory activity will be based on the identification of risks related to the macroeconomic and financial environment, especially with regard to financial stability. We will, for example, incentivise asset managers to put in place more efficient liquidity management tools, to provide better protection for investors.

We want to develop and perpetuate our investigation, inspection and enforcement tools, by establishing, for example, a simplified settlement procedure for simple infringements. We will continue the practice of inspections for educational purposes, which we call "SPOT inspections".

> A commitment: to work to enhance the attractiveness of the Paris marketplace, whose position as the leading European financial centre in terms of market capitalisation is very beneficial for the strategic independence of the European Union and for financing of the economy. We will fully take up the challenge of ensuring the attractiveness of the Paris marketplace.

We will avoid over-regulation, any over-transposition of the European regulations, except, of course, on a case-by-case basis, where there are major implications for investor protection.

We will endeavour to provide the best possible supervisory environment, by developing dialogue with market participants and ensuring we meet our deadlines and are proactive. We will publish recommendations and Q&As to assist the participants in applying the regulations.

We will continue to modernise our tools, especially for data processing.

We will regularly carry out targeted perception studies. Lastly, we will report more on our activity and our performance, for which we are working to implement indicators that we will publish.

Second cross-cutting approach: "Strong international action".

The financial sector is one of the key components of the European Union's strategic independence. In this context, the AMF considers that the European dimension is essential, and it will be naturally treated as a priority.

Our action will be targeted, and will give priority to the quality of regulations and the convergence of supervisory practices in the internal market. Within ESMA, which is an essential partner for the AMF, we will give priority to tools allowing convergence based on a sound understanding of market practices: actual case studies, peer reviews and Common Supervisory Actions.

We will support every effort to establish a more unified European capital market. But noting its current fragmentation and the risks it creates for retail investors, we will plead for an adaptation of the single market's operating rules, by seeking a better balance of power between authorities in the context of the freedom to provide services.

On the international level, the AMF will maintain its significant involvement in the work carried out notably in the International Organization of Securities Commissions (IOSCO), especially regarding the issues of financial stability and financial innovation.

We have also identified three priority issues.

• Protecting retail investors, our top priority.

We want to convey the message of finance accessible to everyone, and not just the experts! We rank retail investor protection as our No. 1 objective, to make finance accessible, useful and trustworthy.

We will monitor the clarity and intelligibility of the information provided to investors, and the comparability of products. We will be attentive to the availability and proximity of advice, which must be provided exclusively in the interest of retail investors. This advice must also be appropriate for the retail investor's profile and objectives.

The training of professionals and the financial literacy of retail investors are the pillars for making informed investment decisions: investors must feel capable of having power over their savings, and feel well supported.

We will therefore be very attentive to the intelligibility of investment vehicles, and transparency regarding fees. This topic was the focus of the work entrusted by the AMF to the Financial Sector Advisory Committee (CCSF), which led to the publication in March 2023 of proposals for improving the clarity of financial product fees in European law.

We will take part actively in work based on the Retail Investment Strategy proposed by the European Commission, in particular concerning the concept of the value for money of financial instruments.

We will continue to invest in the regulation of finance influencers. In particular, we will develop a mapping of retail investors in order to further target our activities.

In a digital, open financial universe, we will also strengthen our tools for monitoring marketing practices and investment offers, and will contribute to the establishment of more stringent regulation of influencers' activity. We will very actively seek to understand the implications of "gamification", which blurs the boundary between gaming and investment. We will be vigilant concerning data protection.

Lastly, as scams and problematic marketing practices are constantly being renewed, we will be at retail investors' side to help them obtain better protection. We will continue our enforcement activities (blacklists, shutdown of websites, etc.) but also our communication campaigns in order to better arm the public and help investors develop a critical mindset.

• Promoting more sustainable finance is our second priority issue.

Climate urgency is a collective priority. France has a special message here. The AMF was a pioneer on these issues, and intends to take the leadership in an ambitious transformation, by helping to improve and clarify the regulations, by working for a consistent and demanding legal framework, and by monitoring information for retail investors.

Since 2018, Europe has developed an ambitious regulatory framework. I am speaking here in particular of the Taxonomy Regulation, the Corporate Sustainability Reporting Directive (CSRD), and the Sustainable Finance Disclosure Regulation (SFDR). We will propose solutions to finalise this framework, and to achieve a set of consistent, high-quality rules.

This framework is very demanding, notably with respect to non-financial reporting. We will ensure that it is implemented correctly, by accompanying all the market participants (companies and fund managers), and by performing operational supervision with a view to ensuring the integrity and quality of non-financial information for investors and the market.

• Supporting innovation is our third priority.

We strongly reaffirm our stance as a regulator open and favourable to innovation.

The AMF has developed genuine expertise concerning the innovation ecosystem. We want not only to identify the principal innovation issues (open finance, decentralised finance, artificial intelligence, etc.), but also to develop essential expertise related to these issues.

We will also take part in national, European and international work for the construction of a regulatory framework, similar to the work on decentralised finance.

We will also supervise satisfactory implementation and compliance with the European Regulation on Markets in Crypto-Assets (MiCA), which provides for mandatory authorisation of crypto-asset service providers. We want to help these market players reach maturity.

Lastly, an essential basis: being an attractive and efficient authority serving the public interest.

The AMF has a reputation for excellence which is its main asset. This reputation is based on the quality of its information systems, but also, and above all, on the quality and dedication of its staff, which I applaud and undertake to promote.

Working in a recognised, independent public authority, and working to serve the public interest makes the dedication of our staff very meaningful.

But we want to work even more to enhance our attractiveness and propose a working environment that is appreciated and sought-after. We intend to confirm our status as an exemplary employer, to have an impact for our staff by providing fulfilling working conditions and enriching career opportunities, and by taking care to maintain high-quality social dialogue. In this way, we can offer our employees the chance to have a real impact on the world that we regulate, but also on our organisation. It's not for nothing that the name of our strategic plan was chosen by our Shadow Comex (mirroring the Executive Committee), bringing together young employees from all our fields of activity!

The AMF will also continue its transformation as part of a drive to improve its performance. As a public entity, we must be exemplary in managing our resources.

We are committed to tighter management processes and greater accountability, notably through performance indicators that we are currently developping, and drawing inspiration, wherever possible, from the best practices of our counterparts.

As you can see, our duties have expanded in recent years and will continue to increase. This is a real challenge for a public authority with limited resources! The AMF has committed itself to strict internal management to give itself leeway. I hope that we will be able to convincingly show the need to provide us with the means to develop further, given the magnitude of the challenges ahead of us, and our ambition to have a real impact on each of them.

The roll-out of the guidelines that I have just presented to you will enable the AMF to perform its duties in optimal fashion and assert itself as the regulator of a law-abiding, dynamic and dedicated French marketplace, essential for financing of the economy and its transition to a more sustainable model.

Thank you for your attention.