The European Securities and Markets Authority (ESMA) has revealed an increased focus on supervisory convergence in 2020.
Outlined in its new ‘Strategic Orientation for 2020-22’, the regulator has revealed the new responsibilities and powers it will have over the next couple of years following the ESA Review and EMIR 2.2.
Last year, the Joint Committee of the European Supervisory Authorities and EMIR 2.2 changed the supervisory framework of the regulators, increasing focus on convergence, supporting the building of the Capital Markets Union (CMU) and implementing more direct supervisory responsibilities.
One of its new responsibilities revolves around investor protections. Over the next couple of years, it will co-ordinate mystery shopping on retail investment products, build retail risk indicators and collect, analyse and report on consumer trends.
ESMA also has new powers around supervisory convergence which will see it use tools such as peer-reviews, Q&As, collective supervisory actions and EU Strategic Supervisory Priorities. The regulator is set to develop an EU supervisory handbook.
Over the coming years, the regulator will also have new tasks for third-country equivalence assessments including monitoring regulatory and supervisory developments.
ESMA will be beginning direct supervision of third-country central counterparties, critical benchmarks, third country benchmarks, data service providers, securitisation repositories and securities financing transactions.
Finally, the regulator is embedding technological innovation, sustainable finance and proportionality into its activities.
ESMA chair Steven Maijoor 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.”
To manage with its new responsibilities, the regulator will grow its team to 384 by 2022.
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