Plan 2021: Esma focusses on adopting single rulebook, supervisory convergence

On the 10/05/20 at 7:29AM


Tuba Raqshan

In its 2021 Work Programme, the European Securities and Markets Authority (ESMA) set out its priorities, which will include developing the retail investor base to support the Capital Markets Union (CMU), promoting sustainable finance and ensuring a proportionate approach to regulation.

Esma’s planned activities for 2021 would respond to the challenges faced by the EU. Steven Maijoor, chair of Esma, underlined that next year will be a change for the organisation, not only in terms of regulatory responsibility but also organisationally.

“On the regulatory front we have more supervisory responsibilities, following the ESA’s Review, for certain central counterparties, benchmarks and securitisation repositories, in addition to our existing supervision of credit rating agencies and trade repositories, while much of our single rulebook and supervisory convergence work will focus on supporting the development of the Capital Markets Union and addressing the impact of both Covid-19 and Brexit on the EU’s markets and investors,” said Maijoor.

Organisationally, Esma will have a new senior management team scheduled to take office by the second quarter next year as both Maijoor and Verena Ross (executive director), leave their roles after a decade.

In 2021, Esma will focus on supervisory convergence, as it prioritises building an EU common risk-based and outcome-focussed supervisory culture. The areas in focus are fund liquidity risk and liquidity management tools, retail investment products costs and performance, quality and usability of data, supervision of ESG reporting and ESG data usage, and the implementation of EMIR. It will also work on peer reviews on supervision of cross-border activities of investment funds and National Competent Authorities’ (NCAs) handling of relocation in the context of Brexit.

The EU securities regulator will also emphasise on integrating financial innovation and ESG into its risk analysis, providing data for risk-based supervision and support policy and convergence work. It will also continue to monitor market impact due to Covid-19 and Brexit.

Esma is also focussing on creating a single rulebook, including legislative reviews of MiFID and AIFMD and identifying possible rulebook changes supporting the CMU. Additionally, it would also prioritise direct supervision, concentrating on third country central counterparty (CCP) supervision as critical financial market infrastructure under EMIR 2.2 and prepare for the new supervisory mandates under Benchmarks and Data Service Providers.