On July 6, the French Autorité des Marchés Financiers (‘French AMF’ or ‘AMF’) published a position paper setting out its guidelines for the development of a European digital strategy for financial services.
The AMF supports the European Commission's (EC) development of a European digital strategy for financial services that would enable innovation in a safe environment.
In this regard, AMF’s proposals are as follows:
Proposals to remove regulatory obstacles to the development of security tokens (securities registered and transferred on blockchains):
Outlining the importance of enabling the digitalisation of financial instruments on blockchain in a secure environment, the AMF propose the amendment of the European texts that constitutes obstacles to the development of security tokens
The AMF proposed the creation of tailored regulatory framework for securities in blockchains and,
The establishment of experimental spaces (or sandboxes) at the European level allowing the national competent authorities (NCAs) to resolve certain regulatory requirements identified as incompatible with the blockchain environment (under certain conditions).
With regard to digital securities platforms, the AMF questioned the current regulatory framework requiring regulated intermediaries (including CSDs) for securities settlement and post-trade delivery operations considering the use of blockchain technologies. The AMF suggested that its peers review the regulatory status of these stakeholders by taking a risk-based approach and considering the blockchain environment.
Proposal to manage the lack of regulation at EU level and the resulting legal uncertainty for digital assets that are not considered as transferable securities;
The AMF propose a European framework for digital assets that are not considered transferable securities as defined by MiFID 2. The latter would enable NCAs to have a harmonized approach regarding AML-CFT control practices that would take into account the specificities of the Blockchain environment.
NCAs could also propose rules of conduct that guaranteed an efficient price formation mechanism and provide greater security for investors.
Proposal to increase the agility of the regulatory framework by encouraging testing of new projects and innovative ideas (provided that it is authorized at European level) and;
Proposal to manage the risks identified in the area of the relationships between cloud providers and financial institutions, regarding the storage and the protection of data, to allow an efficient use of artificial intelligence.
This position paper is a more elaborate version of a document entitled “Building a European digital strategy for financial services” (available in French only) that was first published in January 2020 (https://www.amf-france.org/sites/default/files/2020-02/document-de-travail-de-lamf-sur-linnovation.pdf).
The guidelines are based on the French AMF's responses to a series of consultations launched earlier this year by the EC, including (i) a consultation paper (CP) on the development of a European Digital Finance Strategy, (ii) a CP on the European Data Strategy as well as (iii) a CP on the European approach to Artificial Intelligence.
The position paper can be found here: