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
APRA Issues Interim Update to Policy Priorities for 2021 and Beyond
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
EBA Publishes Single Rulebook Q&A, Launches Transparency Exercise
The European Banking Authority (EBA) published answers to 29 questions in the Single Rulebook Question and Answer (Q&A) tool in September.
EC Adopts Solvency II and Resolution Rules Package for Insurers
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
OCC Issues Booklets on Regulatory Reporting and Earnings
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
ECB Sets Out Results of Economy-Wide Climate Stress Tests
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
EBA Examines Implications of Increasing Use of Digital Platforms in EU
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
