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The work done since 2004 follows on directly from the dematerialisation of securities in France, effected on 5 November 1984 as part of the provisions of Budget Act 81-1160 of 30 December 1981.

That move is rightly viewed as a major change that enabled our securities industry to take a leap forward.  AEDBF, AFTI and Euroclear France felt that this important technical and legal reform should be hailed but also reviewed, and on 4 November 2004, 20 years after dematerialisation was first introduced, they joined forces to organise a conference that took stock of the existing legislation and explored proposed reforms to the legal framework of dematerialisation in France in an evolving European and international context. Academics who attended the conference felt that these efforts should be rounded off by an in-depth consideration of securities legislation.

This bold and innovative approach offers two-fold benefits: it proposes a legal framework for the dematerialisation of financial instruments, and it contributes to the current European debate on securities legislation.

Almost three years on from our conference on voting at general meetings, the time had come to talk about corporate trust services in the context of European harmonisation and to consider the new prospects opened up by issuer needs.

Numerous projects are underway that directly affect issuers, including work on removing the Giovannini barriers, a topic that was discussed on 8 April at our conference on corporate actions.

Other advances need to be borne in mind too, such as the current discussions on EU harmonisation of securities legislation, reforms to infrastructures, and of course the transposition of the Shareholder Rights Directive.

The industry has already implemented a number of changes, particularly regulatory amendments, such as the D-3 record date and the elimination of blocking and tie-up requirements for participation in general meetings. It has also determined the operational procedures for processing corporate actions involving cash and securities distributions and will soon add reorganisations to the list. These efforts are being taken forward through close cooperation between AFTI, intermediaries, the French Banking Organisation and Standardisation Committee (CFONB), regulators and infrastructure providers.

In a direct continuation of efforts by AFTI on general meetings to cut paper use in favour of digital solutions, a marketwide project is being considered to promote online voting and sustainable development, while optimising the role played by intermediaries in accelerating the process of getting votes to the meeting transfer agent.

Following a review of the situation, a panel discussion gave leading issuers an opportunity to voice their expectations and needs in the new setting. In addition, with companies increasingly opening up their capital to international hareholders, in both the retail (employees and non-employees) and institutional categories, issuers’ representatives are having to devise and introduce innovative solutions that satisfy the regulatory and logistical constraints connected with the growth of a non-resident shareholding base and cross-border transactions.

As part of its traditional year-end conference on asset management, AFTI conducted a post-crisis assessment and discussed the short- and medium-term changes needed for the French industry to retain its leadership.

These measures cover areas such as recognising the resurgence of risk and the responsibilities of participants in the chain, promoting asset management activities, sharing costs and fees, and making adjustments to strategic objectives.

The legislative and regulatory initiatives underway at EU level will have a major bearing on all these developments. Accordingly, AFTI assembled a group of European experts to talk about the current harmonisation projects, which include the draft AIFM Directive, the European Commission’s consultation on the depositary function, and Level 2 measures of the UCITS IV Directive.

AFTI gave a progress report on implementation of the 20 AFTIAFG recommendations on the distribution and circulation of investment funds in France and Europe, which were presented with the support of Eurogroup in November 2004.

The conference also gave industry representatives an opportunity to share their views on how the financial crisis had affected post-trade practices and asset managers. Paul Henri de la Porte du Theil, Chairman of the French Asset Management Association, gave the closing address.

The proportion of cross-border transactions is growing constantly in the EU, revealing strong potential, but also sizeable cross-country differences at the post-trade level.

The CESAME group set up by the European Commission is tasked with setting up a harmonised European financial market to replace the existing patchwork of domestic markets. The group is driving efforts in the public and private sectors to remove some of the 15 legal, tax and operational barriers identified by the Giovannini Commission in its 2003 report.

The European Credit Sector Associations (ECSAs) and European Central Securities Depositories Association (ECSDA) have been entrusted with removing Barrier 3 on corporate actions.

Based on their complete analysis of domestic practices and key indicators, they have issued four sets of recommendations on corporate actions (securities distributions). A document listing the new standards to be implemented for each of the recommendations is currently being finalised.

This was the backdrop for AFTI’s decision to hold a conference on implementing a harmonised solution for processing corporate actions, taking into account the future SP Custody of the Euroclear France group, preparations for T2S, and the European Commission’s determination to accelerate, with the support of CESAME II, efforts to build a fully-fledged single post-trade market.