ESMA has published the strategic orientation for 2020-22, which sets out its future focus and reflects its expanded responsibilities and powers following the ESAs Review. The strategic orientation details planned activities of ESMA, to respond to the challenges faced by EU, its citizens, and capital markets, including developing a large retail investor base to support the Capital Markets Union, promoting sustainable finance and long-term oriented capital markets, dealing with the opportunities and risks posed by digitalization, and ensuring a proportionate approach to regulation.
This strategic orientation considers the new powers and responsibilities of ESMA, including the following:
- Assessing risks to investors, markets, and financial stability—ESMA will continue to strengthen its capabilities to identify and assess risks to investors and financial stability in EU, building further on high-quality data. The risk assessment function drives the priority setting of the regulatory and supervisory (convergence) activities of ESMA.
- Supervisory Convergence—ESMA continues to protect the EU Single Market by promoting supervisory convergence focused on supervisory outcomes and by using innovative tools. ESMA prioritizes its supervisory convergence activity through risk-driven assessments and its commitment to consumer protection. This includes building an EU common outcome-focused supervisory and enforcement culture, prioritizing through enhanced risk identification and data collection, and monitoring and following-up on the application of the EU Single Rulebook.
- Direct supervision of specific financial entities—ESMA aims to further strengthen its reputation as supervisor of credit rating agencies and trade repositories, including for securities financing transactions, and will establish itself as a credible supervisor of securitization repositories, critical benchmarks, data service providers, third-country central counterparties, and other third country firms in a number of different areas. For its supervisory responsibilities vis-à-vis the third-country central counterparties, ESMA will step up its risk identification and financial stability assessments.
- Completing the Single Rulebook for EU financial markets—ESMA will continue to develop itself as a source of expertise and strategic direction on financial market regulation recognized by its stakeholders. ESMA will contribute to the planned post implementation reviews of EC on the major acts adopted as part of the post-financial crisis agenda and will prioritize the areas where further work is needed to ensure investor protection and well-functioning markets.
Keywords: Europe, EU, Banking, Securities, Supervisory Convergence, Direct Supervision, Single Rulebook, Sustainable Finance, Proportionality, Digitalization, Credit Rating Agencies, ESAs, ESMA
Previous ArticleEIOPA Issues Parallel Technical Information on RFR Term Structures
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.