Following the 2008 financial crisis, much has been done to improve the resilience, standardisation and level of integration in the European post-trade environment. Kay has been heavily involved in shaping many of these legislative reforms to the cleared derivatives markets and pieces of post-trade market infrastructure – and throughout has always advocated for transparency, non-discriminatory access and alignment with global standards.

Kay champions the removal of the 15 ‘Giovannini barriers’ to post-trade, first identified and consolidated by Alberto Giovannini in 2003. Although determined over 15 years ago, many of these obstacles still exist today and prevent the true consolidation of Capital Markets in the EU.

Documents relevant to Kay’s work on post-trade market infrastructure can be found below:

• Giovannini reports

Launched in 2015, the Capital Markets Union project seeks to build a deeper and more integrated capital market in Europe, diversifying funding options, reducing the dependency on traditional bank financing and lowering the cost of raising capital.

Speaking in 2015 in response to this new initiative, Kay addressed the Plenary chamber in Strasbourg highlighting the need for all Member States to recognise the potential of Capital Markets and commit to its ambition.

“I would like to thank Commissioner Katainen for coming to present the Capital Markets Union Action Plan which sets out the ambition to free up capital flows across the EU and a plan that encourages EU savers to become investors so that they can derive a sustainable income in their old age.

“Beyond all the detail I am sure we will debate at length in the much needed review of the Prospectus Directive and the Securitisation legalisation, are several other measures to ensure a more effective single market for financial services. I would suggest that the real measure of success of the CMU will be whether it becomes relevant to all 28 Member States- whether those countries of the EU currently don’t have active and well-functioning capital markets develop one, and whether all countries can nurture a culture of investment both at a personal and institutional level to fuel investment in their businesses.

“The IMF recognised a long time ago that functioning capital markets are a precondition for a thriving economy and recognise this measure in their country specific assessments on an annual basis. Therefore including this kind of criterion into the European Semester in an analogous way to the IMF will be really important.

“But the CMU should not solely be about legislation nor should it be about spending money on new institutions to achieve a single supervisor – it should be about cultural change so that investors can take appropriate risk and companies don’t see bank loans as the only way to finance investment and growth.

“Achieving diversity in retail finance products available, cross border, will be important but more time dependent will be securing a more diverse array of funding models for our businesses to access capital, both equity and debt via the broad capital market instruments available and emerging. Companies will always need bank financing but a complementary well-functioning capital market is essential for our European companies to grow and be competitive. We need to seek best practice wherever it may have developed and remove all existing barriers erected by Member States which impede capital flows and investor choice which makes pass porting in the fund sector more difficult.

“CMU should stand for choice, diversity and EU expertise.”

• Information- Capital markets union action plan
• Action plan on building a capital markets union
• Mid-term review of the capital markets union action plan

As market players adapt to the increasing amount and complexity of financial regulation, the use of technology to ensure and facilitate compliance has become almost as essential and it is appealing. In her work as chair of the NEX Reg think tank, Kay leads discussion on Regtech and looks at how companies and regulators themselves can utilise new technology to discover the opportunities and meet the challenges that regulation can bring.

Meanwhile, the efficiency gains and solutions that technological advancement can offer the Financial Markets, has brought discussions on FinTech to the forefront. This stands both for industry and regulators looking to manage risk without harming innovation. As Chair of the NEX Reg Think Tank, Kay is heavily involved in the discussion of how to create financial regulation that is fit for purpose and able to cope with a rapidly developing technology sector.

• European Commission FinTech Action Plan 2018

Central Counterparties (CCPs) are key pieces of Financial Market infrastructure that sit at the centre of a trade. A regime that ensures the safe and efficient recovery and resolution of a CCP in times of market stress, is essential for the resilience of the whole financial market.

Kay’s work on this topic began in 2012 when she was appointed the Rapporteur on a European Parliament report looking at recovery and resolution frameworks for non-bank institutions. Following on from this report, in 2016 she was appointed co- rapporteur for the legislative report on specifically CCP recovery and resolution.

Documents relevant to Kay’s work on CCP recovery and resolution can be found below:

• 2013 European Parliament Resolution 
• 2017 European Commission Legislative Proposal 
• 2018 European Parliament Draft Report 

Devised in response to the G20 Pittsburg agreement in 2010, EMIR encourages a transparent and centralised approach to the OTC derivatives markets, central counterparties and trade repositories.

Kay has worked on the European Financial Markets and Infrastructure legislation since the first Commission draft in 2010. She is currently serving as Shadow Rapporteur for the EMIR review – both on the ReFIT file and on the Supervision discussion.

As a member of the Parliament’s negotiating team Kay fought hard to secure a corporate exemption from the clearing obligation and an ongoing commitment to the global framework.

Documents relevant to Kay’s work on EMIR can be found below:

• European Markets Infrastructure Regulation 2012
• EMIR review 2017 – present
  • ReFIT
    • 2017 European Commission Draft Amendments 
    • 2017 European Council General Approach FIND LINK
    • 2018 European Parliament Draft Report 
  • Supervision
    • 2017 European Commission Draft Amendments 
    • 2018 European Parliament Draft Report 

Introduced in 2015, the Securities Financing Transactions Regulation seeks to increase the level of transparency in securities financing by mandating the use of trade repositories, the issuing of pre-investment documentation and the frequent investor disclosure.

Documents relevant to Kay’s work on SFTR can be found below:

• Securities Financing Transactions Regulation 2015 

The Central Securities Depositories Regulation is a key piece of post crisis legislation. Designed to increase the safety and efficiency of securities settlement, the CSDR rules introduce a shortened settlement period, deterrents for settlement failure and prudential & governance rules for CSDs.

As Rapporteur, Kay was responsible for introducing a system that would harmonise authorisation and supervision of EU CSDs and compliment the newly designed Target 2 Securities system.

Documents relevant to Kay’s work on CSDR can be found below:

• Centralised Securities Depositories Regulation 2014 

Implemented in January 2018, the Markets in Financial Instruments Directive II (MiFID2) is an extensive piece of financial markets legislation designed to encourage competition, increase market transparency and empower the end investor.

Kay has worked on the MiFID legislation for over 9 years. Her  legislative work in this field predates the Commission’s MiFID2 review, as in 2010 she was appointed Rapporteur on a European Parliament report looking at Dark Pools and HFT, which went on to shape much of the Parliament’s subsequent response to MiFID2.

As a key member of the European Parliament’s negotiating team, Kay was instrumental in securing a year- long extension in implementation, thereby allowing regulators and market participants the chance to fully update their systems and practises.

• 2010 European Parliament Resolution
• 2014 Markets in Financial Instruments Directive II 

Creating a regulatory environment that supports the development of small and medium sized companies is a priority for Kay and her constituency, where over 99% of companies are classified as SME’s. As a Vice-chair of the European Parliament’s SME Intergroup, Kay regularly hosts roundtable meetings bringing together policy makers and small business owners to discuss the obstacles and barriers to growth that SMES face and potential policy solutions.

In her legislative work, Kay has also championed the voices of SMEs – most recently during the MiFID2 discussions where the creation of a specialised SME listing platforms was first introduced. Kay has been involved in developing this idea and encouraging SME’s to seek equity investment, she is currently part of the parliamentary team reviewing the current framework and market practise.

Kay has long been a  supporter of the London Stock Exchange Group’s ‘1000 companies to Inspire Europe’

• Promoting SME growth markets: Commission proposal for a regulation amending the market abuse regulation and the prospectus regulation
• Draft Parliamentary Report: Promotion of the use of SME growth markets