The European Securities and Markets Authority (“ESMA”) is guiding and supervising the EU’s financial markets since 2011 and during the time has proved itself as reliable and constructive regulator.
Following the EU’s Parliament and Council decisions, ESMA will be assigned new and additional tasks in 2020 which will enhance its positions in the financial markets’ supervision, investor protection, transparency and appropriate practices in regard with technological evolution which is accelerating the innovations on daily basis.
ESMA already published its “2020 Annual Work Programme” explaining the focus and key priorities for the next year (more details here: https://www.esma.europa.eu/document/2020-work-programme) and here is a summary of the planned work, efforts and areas of importance:
- Supervisory convergence – the aim is for common interpretation of rules, consistency and data quality peer review as prerequisite for data-driven supervision)
- Risk assessment –the usage of data collected will be further utilized to ensure efficient supervision and risk prevention
- Single Rulebook –in 2020 ESMA will advise the European Commission in regard with some key provisions of MiFID II/MiFIR and MAR, as well as to contribute the plans on the Capital Markets Union, Fintech, and Sustainable Finance
- Direct Supervision – the supervision of Credit Rating Agencies, Trade Repositories under EMIR and SFTR, recognition of third-country Central Counterparties (CCPs) and Central Securities Depositories (CSDs) will continue with focus on the processes, internal governance, controls and information security
Most of those tasks are familiar, but they will be performed by ESMA along with the completely new ones, which include:
- ESA’s Review – ESMA shall adapt to changes stemming from the European Supervisory Authorities (ESAs) legislation review
- EMIR 2.2 – to ensure efficient supervisory and regulatory framework to EU and third-country CCPs in regard with EMIR 2.2
- Cross-border funds distribution – to deliver relevant Technical and to ensure that corresponding IT tools are developed
- Investment Firms Framework – new rules and requirements in regard with capital, liquidity and regulatory reporting for the investment firms in the EU
- Sustainable Finance – to strengthen and improve the disclosure of information by manufacturers of sustainable financial products and financial advisors towards end-investors
Like every organisation, ESMA constantly evolves and the changes planned for 2020 will strengthen its role as one of the guardians of the financial markets in the EU.