The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its Strategic Orientation for 2020-22. The Strategic Orientation sets out ESMA’s future focus and objectives and reflects its expanded responsibilities and powers following the ESAs Review, and EMIR 2.2, which increases its focus on supervisory convergence, strengthens its role in building the Capital Markets Union (CMU) and gives it with more direct supervision responsibilities.

The strategy details ESMA’s planned activities, based on its enhanced role, to respond to the challenges faced by the EU, its citizens and capital markets including developing a large retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, dealing with the opportunities and risks posed by digitalisation, the EU’s role in international finance and ensuring a proportionate approach to regulation.

Steven Maijoor, ESMA Chair, said: “ESMA can look back on a successful first nine years that has included the development of the Single Rulebook and establishing itself as a credible supervisor of CRAs and TRs.

“One of our key priorities is ensuring the consistent and coherent implementation of the Single Rulebook and, with our new powers in this area, we will adopt a risk-based approach, in cooperation with national authorities, to supervisory convergence across the EU.

“While we will evolve further as a direct supervisor, with responsibility for critical benchmarks and data service providers and 3rd country CCPs, prioritising those areas posing the greatest risks to our objectives.

“The new Strategic Orientation sets out how we will exercise our new powers, and meet our new responsibilities, in pursuit of our mission of enhancing investor protection and promoting stable and orderly financial markets in the EU.”

New Responsibilities and Powers

ESMA’s new powers and responsibilities following the outcome of the ESAs Review, EMIR 2.2 and other recent legislative developments include:

- Supervisory Convergence - enhanced supervisory convergence tools, such as peer reviews, Q&As, collective supervisory actions and EU Strategic Supervisory Priorities, while it will develop an EU supervisory handbook;

- Investor Protection - it will co-ordinate mystery shopping on retail investment products, develop retail risk indicators, and collect, analyse and report on consumer trends;

- International - new tasks for third-country equivalence assessments including monitoring regulatory and supervisory developments in equivalent third countries, assisting the European Commission in preparing equivalence decisions, and a strengthened role in international fora.

- Transversal topics - ESMA must embed technological innovation, sustainable finance and proportionality in its activities;

- Direct Supervision:

Third-country central counterparties;

critical benchmarks, third-country benchmarks and data service providers from January 1 2022;

Securitization repositories under the Securitization Regulation; and

Securities financing transactions under the Securities Financing Transactions Regulation.

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The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its Strategic Orientation for 2020-22. The Strategic Orientation sets out ESMA’s future focus and objectives and reflects its expanded responsibilities and powers following the ESAs Review, and EMIR 2.2, which increases its focus on supervisory convergence, strengthens its role in building the Capital Markets Union (CMU) and gives it with more direct supervision responsibilities.

The strategy details ESMA’s planned activities, based on its enhanced role, to respond to the challenges faced by the EU, its citizens and capital markets including developing a large retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, dealing with the opportunities and risks posed by digitalisation, the EU’s role in international finance and ensuring a proportionate approach to regulation.

Steven Maijoor, ESMA Chair, said: “ESMA can look back on a successful first nine years that has included the development of the Single Rulebook and establishing itself as a credible supervisor of CRAs and TRs.

“One of our key priorities is ensuring the consistent and coherent implementation of the Single Rulebook and, with our new powers in this area, we will adopt a risk-based approach, in cooperation with national authorities, to supervisory convergence across the EU.

“While we will evolve further as a direct supervisor, with responsibility for critical benchmarks and data service providers and 3rd country CCPs, prioritising those areas posing the greatest risks to our objectives.

“The new Strategic Orientation sets out how we will exercise our new powers, and meet our new responsibilities, in pursuit of our mission of enhancing investor protection and promoting stable and orderly financial markets in the EU.”

New Responsibilities and Powers

ESMA’s new powers and responsibilities following the outcome of the ESAs Review, EMIR 2.2 and other recent legislative developments include:

- Supervisory Convergence - enhanced supervisory convergence tools, such as peer reviews, Q&As, collective supervisory actions and EU Strategic Supervisory Priorities, while it will develop an EU supervisory handbook;

- Investor Protection - it will co-ordinate mystery shopping on retail investment products, develop retail risk indicators, and collect, analyse and report on consumer trends;

- International - new tasks for third-country equivalence assessments including monitoring regulatory and supervisory developments in equivalent third countries, assisting the European Commission in preparing equivalence decisions, and a strengthened role in international fora.

- Transversal topics - ESMA must embed technological innovation, sustainable finance and proportionality in its activities;

- Direct Supervision:

Third-country central counterparties;

critical benchmarks, third-country benchmarks and data service providers from January 1 2022;

Securitization repositories under the Securitization Regulation; and

Securities financing transactions under the Securities Financing Transactions Regulation.