The second day of AFME’s European Compliance and Legal Conference saw the focus shift from compliance leads to general counsels, as representatives from Deloitte Legal (UK), Rothschild & Co, HSBC, Nordea, and Société Générale spoke in a panel discussion about how the legal function is changing from a skills and technology perspective and looking at the priorities for 2024 and beyond.

Smaller panels then picked up some of the points that came up on day one, notably AI opportunities and challenges for compliance, and operational resilience in a digital era.

ESMA and data reporting

In a keynote address to open day two, Rodrigo Buenaventura, Chair, CNMV, emphasized the importance of balancing regulatory requirements with the need for quality data reporting, the role of the European Securities and Markets Authority (ESMA) in enhancing regulatory convergence, and the ongoing evolution of the EU’s supervisory architecture to ensure efficient and consistent application of financial rules across member states.

In their keynote discussion, Buenaventura and Bhararat Samani, Head of Compliance UK and Europe, BBVA, discussed the EU Listing Act, which aims to make capital markets more appealing for companies within the EU. Buenaventura expressed concerns about potential unintended consequences with the prospectus law, and highlighted the increasing reporting requirements imposed on the financial sector in recent years.

Data for supervision and risk monitoring

The importance of data for proper supervision and risk monitoring was also discussed, especially in light of recent market changes. Inadequate data could jeopardise the stability and integrity of financial markets. Instead of aiming for an overall reduction in reporting, Buenaventura suggested a more prudent approach would be to reduce the costs associated with reporting. He urged a rethinking of the logic and features of current reporting practices.

Finally, Buenaventura addressed the evolving landscape of financial regulation, emphasizing the need for greater regulatory harmonisation and convergence in EU capital markets. He proposed a stronger ESMA with increased powers with the authority to hold national supervisors accountable for consistent and correct application of EU rules.

The day concluded with a keynote by Carlo Comporti, Commissioner, Consob, after several separate panel discussions on how to handle regulatory investigations, AI opportunities and challenges, and operational resilience. Comporti addressed concerns surrounding cryptocurrencies and the growing trend of young generations shifting from bank deposits to cryptocurrencies.

He emphasized a need for investor awareness and risk management in the crypto market, saying the lack of regulation will need to be addressed at the national level, due to the diversity of regulatory regimes in Europe. Embracing innovation and creating good conditions for digital assets and Distributed Ledger Technology (DLT) were mentioned as strategies to support upcoming initiatives.