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
HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.
The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.
MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.
EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.
EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.
FFIEC, on behalf of its members that include US Agencies such as CFPB, FDIC, FED, NCUA, and OCC, issued a joint statement that sets out prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers.
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).