The European Securities and Markets Authority (ESMA) has published the 2022 annual work program, which sets out work priorities for the next 12 months. The key focus areas for 2022 include the exercise of new, and existing, supervisory powers for benchmarks, data service providers, and central counterparties (CCPs); contribution to development of the Capital Markets Union, sustainable finance, and digitalization; and convergence of supervisory and regulatory practices across European Union. ESMA will also continue to monitor the impact of Brexit on the evolution of European Union and global capital markets.
The following are the key highlights of the priorities for 2022:
- Capital Markets Union—ESMA plans to contribute to developments in the regulatory and supervisory framework supporting the development of European capital markets, notably through its work on the European single access point (ESAP), retail investment strategy, and EC initiatives to facilitate small and medium enterprise (SME) access to public markets
- Sustainable finance—ESMA intends to develop rules on environmental, social, and governance (ESG) disclosures and risk identification methodology for ESG factors, contribute to the work on non-financial reporting, and work with national authorities to prevent the risk of greenwashing.
- Innovation and digitalization—ESMA intends to contribute to the implementation of the Digital Operational Resilience Act (DORA), the Markets in Crypto Assets Regulation (MiCA), and the regulation on a pilot regime for market infrastructures based on distributed ledger technology. ESMA also plans to further its understanding of the impact of financial innovation on capital markets and foster a coordinated approach, and work with national competent authorities and market participants to counter cyberthreats and other operational risks.
- Supervisory Convergence—ESMA will continue to contribute to a sound and efficient Single Market in the European Union by promoting supervisory convergence focused on supervisory outcomes and using innovative tools. ESMA prioritizes its supervisory convergence activity through risk-driven assessments and its commitment to consumer protection. ESMA will assess the results of Union Strategic Supervisory Priorities and will thoroughly review its supervisory convergence toolkit. ESMA will deliver peer reviews on supervision of investment firms cross-border activities, national competent authorities’ handling of Brexit-related relocations, implementation of simple, transparent, and standardized (STS) criteria, and supervision of CCPs’ business continuity under remote working arrangements.
- Risk Assessment—ESMA will strengthen its risk identification work and co-operation with national competent authorities and EU and international public authorities. ESMA will further intensify the use and analysis of its proprietary financial market data. ESMA will also support stress-testing for risk identification and supervisory responses to financial stability risks. ESMA will continue to evaluate the benefits and risks of financial innovation and ESG developments on financial markets and investors.
- Single Rulebook—ESMA will continue to develop as a source of expertise and strategic direction on financial market regulation recognized by its stakeholders—the European Union institutions, market participants, investors, and citizens. As part of this development, ESMA will continue its efforts to be more proactive, by identifying potential shortcomings in regulations, and offer advice on the strategic direction of the regulatory agenda.
- Direct Supervision—ESMA will continue to prioritize the areas where it has been entrusted with supervisory responsibilities notably for Credit Rating Agencies and Securitization and Trade Repositories. In 2022, it will additionally focus on the new entities coming under its direct supervision—critical benchmarks, Data Reporting Service Providers and Tier 2 CCPs—and play an important role in the oversight of critical market infrastructures.
Keywords: Europe, EU, Banking, Securities, Sustainable Finance, ESG, Disclosures, Capital Markets Union, Single Rulebook, Brexit, Operational Risk, Regtech, DORA, ESMA
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