Steven Maijoor of ESMA Speaks on Implementation of MiFID II and Brexit
The ESMA Chair Steven Maijoor delivered a statement at the European Parliament, as part of the annual hearing of the chairs of the three ESAs. He briefly outlined ESMA’s key activities over the past 12 months, along with the upcoming challenges for the EU’s capital markets and ESMA. The key covered activity areas were single rulebook, supervisory convergence, risk assessment, and direct supervision. The statement was largely focused on implementation of the second Markets in Financial Instruments Directive (MiFID II) and the UK's exit from the EU.
In his statement, Mr. Maijoor focused on ESMA’s work in preparation for the implementation of MiFID II as well as on the general readiness of regulators to operate within the new framework. “MIFID II implementation highlights that the single rulebook needs to be complemented by supervisory convergence measures. Therefore, in the past 12 months, ESMA issued a large number of guidelines and questions and answers to ensure coherent and consistent application of the rules coming into force,” said the ESMA Chair.
With regard to the work on preparing for Brexit, he highlighted that certain market participants needing to re-locate from the UK to the EU-27 to maintain Single Market access sparked concerns about regulatory arbitrage among the EU-27 member states to attract business. One general opinion was issued in May and three sector-specific ones were issued in July for investment firms, secondary markets, and asset management; these opinions tackled the key aspects of outsourcing and delegation to third countries. As per Mr. Maijoor, “We relied strictly on existing EU legislation, and aimed at providing appropriate guidance to the NCAs [national competent authorities], which are dealing with requests from re-locating entities. Moreover, in the interest of supervisory and regulatory convergence, ESMA launched the Supervisory Cooperation Network, offering a forum for NCAs to discuss individual relocation cases on an anonymous basis.”
He also explained that ESMA has recently commenced its work on reviewing its Guidelines for the Endorsement of Third-Country Credit Rating Agencies. However, it is clear that some significant legislative changes need to be considered soon, potentially in a horizontal manner. The first steps have been made by the EC in relation to the European Markets Infrastructure Regulation (EMIR). The ESMA Chair welcomed the proposal to assign certain supervisory powers over third country-central counterparties (CCPs) to ESMA, in relation to CCPs having a significant impact on the stability of the EU financial market. He concluded that further bold steps are required to maintain momentum in the delivery of the Capital Markets Union, following on the initiatives that have been already taken.
Related Link: Statement (PDF)
Keywords: Europe, EU, UK, Securities, MiFID II, Brexit, EMIR, CCP, Capital Markets Union, ESAs, ESMA
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