Featured Product

    ESMA Sees Scope for Improvement in Derivative Data Supervision by NCAs

    October 17, 2019

    ESMA published the results of a peer review it conducted into supervisory actions of six national competent authorities, or NCAs, regarding their approaches at enhancing the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR). The review assessed that ESMA broadly meets the expectations of the peer review in terms of the overall supervisory approach and the integration of EMIR data within its organization. The review complements the Data Quality Action Plan of ESMA to further improve the quality and usability of derivatives data. The review period was from January 01, 2017 to December 31, 2018. The six authorities include the Netherlands Authority for the Financial Markets, the French Authority of the Financial Market, BaFin, the Central Bank of Ireland, the Cypriot Securities and Exchange Commission, and FCA. In addition, ESMA was reviewed in its role as the direct supervisor of trade repositories.

    The review was targeted at national competent authorities that supervise important derivative markets in EU and have key counterparties reporting their derivative trades to EU trade repositories. The majority of authorities had in place a supervisory approach to the EMIR data quality. The French Authority of the Financial Market, the Central Bank of Ireland, and the Netherlands Authority for the Financial Markets are broadly meeting expectations of the peer review regarding overall supervisory approaches to EMIR data quality. In addition to participating in the data quality review these three national authorities undertook onsite inspections, thematic reviews, and developed an internal methodology for data quality breaches by counterparties. However, two authorities lagged behind when it comes to integrating EMIR data quality controls into their overall supervisory approach, which negatively impacted the ability of ESMA to access, assess, and analyze EMIR data. The review also identified good supervisory practices by all these authorities.

    In terms of integration of EMIR into the overall supervisory approach of national competent authorities, the peer review identified that the French Authority of the Financial Market and the Central Bank of Ireland fully meet expectations of the review. The Netherlands Authority for the Financial Markets is broadly meeting and BaFin is partially meeting the expectations. The review also identified that Cypriot Securities and Exchange Commission and FCA are not meeting the expectations. In respect of data access, analysis, and assessment, the peer review identified that the Netherlands Authority for the Financial Markets fully meets expectations of the review while the French Authority of the Financial Market and BaFin partially meet the expectations.

    ESMA also put forward several initiatives to improve the supervision of data quality in the short and long-term. The short-term initiatives include revising the national competent authorities' annual Data Quality Review exercises and identifying how these authorities can regularly use the data as part of their overall supervisory approach. The peer review also examined the more detailed and focused aspects of data quality supervision by focusing on the intensity of supervision, the frequency of the data quality checks undertaken, and the comprehensiveness of the  approach of authorities to sampling. A follow-up review is expected in two years. 

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, Peer Review, EMIR, National Competent Authorities, Data Quality, Supervisory Approach, OTC Derivatives, Reporting, ESMA

    Featured Experts
    Related Articles
    News

    EBA Proposes Guidelines for Establishing Intermediate Parent Entities

    EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.

    January 15, 2021 WebPage Regulatory News
    News

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Issues Erratum for Technical Package on Reporting Framework 3.0

    EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.

    January 14, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets

    APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for Third Quarter of 2020

    EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Finalizes Guide on Supervisory Approach to Bank Consolidation

    ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.

    January 12, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6432