The Association for Financial Markets in Europe (AFME) is calling on the European Union to help unlock the potential of new technologies for European capital markets.

In a paper published today, the industry body outlined the regulatory framework needed to support banks as they adopt new technologies such as crypto assets, artificial intelligence and cloud computing, harnessing the value from data and address the challenges of cyber security and operational resilience.

The report called on the European Commission (EC) to promote innovation, competitiveness, and resilience across Europe’s capital markets by providing a level playing field.

AFME said the EC must ensure that all firms involved in financial services - including technology firms - adhere to the "same risk, same activity, same regulation" principle.
The paper also stated that technology neutral legislation was crucial to provide flexibility for firms to adopt new technologies in a risk based and proportionate manner.

Finally, AFME also requested global consistency while promoting regulatory harmonisation across the EU and further afield, in order to reduce the barriers for technology adoption.

James Kemp, managing director and head of technology and operations at AFME, said: “Evolving technologies are enabling innovative financial products and services, improving the resilience of financial markets, and supporting new ways of working, so it is important that consistently applied regulation supports these new technologies to unlock a vibrant and competitive Digital Single Market and build stronger, more efficient capital markets infrastructures.

"The COVID-19 pandemic has reinforced this requirement, demonstrating how technology has underpinned the continued functioning and resilience of capital markets.”

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