ESMA Publishes Call for Evidence on Digital Finance
ESMA published a call for evidence on digital finance that aims to gather relevant information on issues such as value chains, platforms, and groups’ provision of financial and non-financial services. ESMA will consider the information received through this call for evidence when drafting its advice to EC. EC aims to address the challenges and risks associated with digital transformation by proposing, where relevant, adaptations to the existing legislative framework by mid-2022. The call for evidence is open until August 01, 2021 and ESMA, along with the other ESAs, will deliver a report to EC by January 31, 2022.
EC had, in February 2021, set out a request for technical advice to ESAs on three main issues: the growing fragmentation of value chains in finance, digital platforms, and groups combining financial and non-financial activities. ESAs are expected to assess the regulatory and supervisory challenges brought by these developments and the way in which they could be addressed. ESMA is seeking feedback from external stakeholders, on the following, to inform its work on the matter:
- More fragmented or non-integrated value chains. The call for evidence aims to collect evidence on new material developments in the evolution and fragmentation of value chains arising as a result of financial firms increasingly relying on third parties for the delivery of their services and of technology companies entering financial services.
- Platforms and bundling of various financial services. The call for evidence is intended to help ESMA collect insights on the use of digital platforms in the EU the extent to which this phenomenon introduces new risks and/or create regulatory and supervisory challenges.
- Risks of groups combining different activities. The call for evidence aims to collect evidence on whether large technology companies as mixed-activity groups should be supervised specifically. It also intends to collect evidence on how interdependencies, , and potential risks stemming from these, within the groups can be identified and addressed as well as on how supervisory cooperation can be improved for these groups.
The call for evidence is of interest to financial firms relying on third parties, in particular technology firms, to fulfil critical or important functions. It is also of interest to third-parties, technology firms, platforms marketing or providing access to different financial services, mixed activity groups combining financial and non-financial activities, and investors.
Related Links
Comment Due Date: August 01, 2021
Keywords: Europe, EU, Banking, Securities, Digital Finance, Fintech, Digital Platforms, Regtech, Bigtech, ESAs, ESMA, EC
Previous Article
US Agencies to Revise Call Reports, FFIEC 002, and FFIEC 002SRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BaFin Consults on Resolvability Requirements for Resolution Planning
The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.
EBA Consults on Certain Standards and Guidelines Under CRR and BRRD
The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.
OJK Publishes Regulatory Updates for Financial Sector Entities
The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)
EU Publishes Rules on DLT and Data Governance
The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).
EBA Publishes Phase 2 of Reporting Framework 3.2
The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications