ESMA published the work program for 2020. The work program sets out the work priorities and focus areas for the next 12 months. The key work of ESMA in 2020 will involve implementation of the new mandates and enhanced role in areas of direct supervision, supervisory convergence, investor protection, relations with third countries, sustainability, and technological innovation. In addition, ESMA will continue to prioritize responding to the risks and challenges posed by Brexit.
The work program highlights that the supervisory convergence priorities for year will be to implement strengthened convergence and co-ordination powers under the new founding regulation and foster exchanges on supervisory and enforcement matters. ESMA will also monitor market developments to drive the convergence initiatives for financial innovation, with focus on regulation and supervision of initial coin offerings and crypto assets, innovative fintech business models, national innovation hubs and regulatory sandboxes, and cyber security and cyber resilience. In terms of risk assessment, ESMA will focus on ensuring good use of the collected data. The risk assessment of ESMA draws on data and statistics sourced and managed through an integrated approach, ensuring high quality, efficient management, and an effective use, especially of the proprietary data that ESMA collects.
ESMA still has several regulatory tasks under the EC action plans on the Capital Markets Union, fintech, and sustainable finance. It will prioritize the areas of its single rulebook work that contribute to those action plans. ESMA will consider risks related to environmental, social, and governance related in performing its tasks. In its activities, ESMA will further incorporate proportionality in all its actions, by taking into account the nature, scale, and complexity of risks, business practices, business models, and size of the financial-sector operators and markets. ESMA will monitor the consistent implementation of the Securitization Regulation, particularly the delegated acts of EC, and consider whether any need for further guidance is necessary. ESMA will continue its registration and supervision of credit rating agencies, trade repositories, and securitization repositories, in addition to work on the recognition of third-country central counterparties and central securities depositories.
ESMA will continue to focus its supervisory work on the rating processes, the IT processes, the governance, the internal controls, and the information security, assessing the potential risks identified in these areas. ESMA will also actively monitor the implementation of requirements related to the European Single Electronic Format (ESEF) and consider if there is a need to provide further assistance to market participants. The work program also highlights that ESMA will start implementing new tasks regarding equivalence assessments of third-country regulatory and supervisory frameworks. These tasks will include monitoring and informing the European Parliament, Council, and Commission on regulatory and supervisory developments in third countries regarding which an equivalence decision has been adopted and contributing to the united, common, and consistent representation of EU interest in international fora (such as IOSCO and FSB).
Keywords: Europe, EU, Banking, Securities, Supervisory Convergence, Brexit, Proportionality, Sustainable Finance, Single Rulebook, Fintech, Securitization Regulation, ESEF, Equivalence Assessments, Work Program, ESMA
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.