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    ESMA Sets Out Strategy for Coming Months, Issues Other Updates

    October 10, 2022

    The European Securities and Markets Authority (ESMA) published its strategic priorities for 2023 to 2028, annual work program for 2023, an article on crypto-assets and their risks for financial stability as part of the Trends, Risks and Vulnerabilities report, as well as questions and answers on the European crowdfunding service providers for business regulation (EU Regulation 2020/1503). Additionally, ESMA and the Austrian Financial Market Authority (FMA) welcomed the inclusion of Raiffeisen Bank International AG (RBI) in the Euro Interbank Offered Rate (EURIBOR) panel of banks.

    Below are the key highlights of these recent updates:

    • In the Strategy for 2023-2028, ESMA announced its long-term priorities and how it will use its competences and toolbox to respond to future challenges and developments. The strategy is centered on three priorities and two thematic drivers. The three strategic priorities include fostering effective markets and financial stability, strengthening the supervision of European Union financial markets, and enhancing the protection of retail investors, while the two thematic drivers cover enabling sustainable finance and facilitating technological innovation and effective use of data. ESMA plans to implement this strategy over the next years while being mindful of market developments and emerging risks as well as new legal mandates and available resources both at ESMA and the national competent authorities.
    • In the 2023 Annual Work Program, ESMA sets out priority work areas for the next year to deliver on its mission toward enhancing investor protection and promoting stable and orderly financial markets. The key deliverables for the 2023 work program include enabling sustainable finance by developing remaining technical standards under the Sustainable Finance Disclosure Regulation (SFDR); facilitating technological innovation and effective use of data by developing technical standards and guidelines for the implementation of new regulations on the Digital Operational Resilience Act (DORA), the Regulation on Markets in Crypto-Assets (MiCA), and the Distributed Ledger-Technology (DLT) Pilot Regime; continuing supervision of key market infrastructures and retail investors in areas such as sustainability, greenwashing risks in sustainable investment products, risk-based supervision of all European Union Credit Rating Agencies (CRAs), and benchmark administration.
    • Crypto-assets and their risks in financial stability. ESMA published its trends, risks, and vulnerabilities report, which contains an article that identifies risks in the market for crypto-assets and these risks could serve as sources of financial instability. The article analyzes the interlinkages of crypto-assets with traditional markets (that is, transmission channels that could create contagion risks) and outlines two broad category of risks: risks observed in traditional markets (for example, speculation or leverage) and novel risks that are inherent to product design, technological development, or the complex infrastructures built around crypto-assets. The article notes that continuous monitoring of the crypto-asset market and its interconnectedness with the wider financial system is required to assess newly emerging threats in a timely manner, while regulations such as the European Union proposal on Markets in Crypto-Assets (MiCA) should be implemented swiftly to mitigate already identified risks. ESMA is in the process of including crypto-assets in its risk monitoring framework and will continue to analyze material risk issues as they emerge.
    • EURIBOR panel enlargement. ESMA and the Austrian Financial Market Authority (FMA) welcomes the inclusion of Raiffeisen Bank International AG (RBI) in the panel as a positive development for users of EURIBOR and for safeguarding market confidence in this critical benchmark in general. The enlargement of the EURIBOR panel will contribute to the robustness and reliability of EURIBOR by supporting its capacity to measure its underlying market. The Austrian FMA will be responsible for the supervision of RBI under the Benchmarks Regulation (BMR) when the bank will start contributing to the EURIBOR panel. 

     

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    Keywords: Europe, EU, Banking, Securities, Strategic Priorities, Work Program, Sustainable Finance, Regtech, SFDR, DORA, MiCA, Distributed Ledger Technology, Greenwashing, Cryptoassets, EURIBOR, Raiffeisen Bank, Benchmarks Regulation, ESG, Austrian FMA, ESMA

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