ESMA has published the strategic orientation for 2020-22, which sets out its future focus and reflects its expanded responsibilities and powers following the ESAs Review. The strategic orientation details planned activities of ESMA, to respond to the challenges faced by EU, its citizens, and capital markets, including developing a large retail investor base to support the Capital Markets Union, promoting sustainable finance and long-term oriented capital markets, dealing with the opportunities and risks posed by digitalization, and ensuring a proportionate approach to regulation.
This strategic orientation considers the new powers and responsibilities of ESMA, including the following:
- Assessing risks to investors, markets, and financial stability—ESMA will continue to strengthen its capabilities to identify and assess risks to investors and financial stability in EU, building further on high-quality data. The risk assessment function drives the priority setting of the regulatory and supervisory (convergence) activities of ESMA.
- Supervisory Convergence—ESMA continues to protect the EU Single Market by promoting supervisory convergence focused on supervisory outcomes and by using innovative tools. ESMA prioritizes its supervisory convergence activity through risk-driven assessments and its commitment to consumer protection. This includes building an EU common outcome-focused supervisory and enforcement culture, prioritizing through enhanced risk identification and data collection, and monitoring and following-up on the application of the EU Single Rulebook.
- Direct supervision of specific financial entities—ESMA aims to further strengthen its reputation as supervisor of credit rating agencies and trade repositories, including for securities financing transactions, and will establish itself as a credible supervisor of securitization repositories, critical benchmarks, data service providers, third-country central counterparties, and other third country firms in a number of different areas. For its supervisory responsibilities vis-à-vis the third-country central counterparties, ESMA will step up its risk identification and financial stability assessments.
- Completing the Single Rulebook for EU financial markets—ESMA will continue to develop itself as a source of expertise and strategic direction on financial market regulation recognized by its stakeholders. ESMA will contribute to the planned post implementation reviews of EC on the major acts adopted as part of the post-financial crisis agenda and will prioritize the areas where further work is needed to ensure investor protection and well-functioning markets.
Keywords: Europe, EU, Banking, Securities, Supervisory Convergence, Direct Supervision, Single Rulebook, Sustainable Finance, Proportionality, Digitalization, Credit Rating Agencies, ESAs, ESMA
Previous ArticleAPRA Authorizes New Restricted Authorized Deposit Taking Institution
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.