ESMA sets out 2019 priorities, plans fintech regulatory intervention under MiFIR

The European Securities and Markets Authority (ESMA) has published its 2019 Work Program (WP), which sets out its priorities and areas of focus for 2019 in support of its mission to enhance investor protection and promote stable and orderly financial markets.

ESMA, in line with its Strategic Orientation 2016-2020, will maintain its focus on its activities of supervisory convergence and assessing risks in financial markets. Additionally, ESMA will take on new direct supervisory responsibilities under the Securities Financing Transactions Regulation (SFTR) and the Securitisation Regulation. It will also support the Sustainable Finance Initiative through a set of priority actions, aiming to integrate environmental, social and governance (ESG) considerations as part of the investment chain.

Preparations for the UK’s withdrawal from the European Union will continue to be a major focus for ESMA in 2019. This will require ESMA to be prepared to adapt and reprioritize the WP as needed.

Steven Maijoor, ESMA chair, said in a statement: “In 2019 ESMA will continue its focus on promoting supervisory convergence and assessing risks with a continued emphasis on the consistent implementation of MiFID II/MiFIR, but with an added focus on utilizing the data gathered under this regime to assist us in meeting our stability, orderly markets and investor protection objectives.”

In 2019 the key areas of focus will be:

  • supporting the consistent application of MiFID II and MiFIR along with the Prospectus Regulation and Securitisation Regulation by market participants and National Competent Authorities (NCAs);
  • utilizing the data gathered under MiFID II/MiFIR to support its work on stable and orderly markets;
  • contributing to the implementation of the Capital Markets Union Action Plan and of the Fintech Action Plan; and
  • enhancing the effectiveness of its supervisory activities for credit rating agencies (CRA) and trade repositories (TR), while preparing for the registration and supervision of new entities under the Securitisation Regulation and SFTR.

On the fintech side, ESMA said the key objectives for financial innovation and product risk analysis is to achieve a coordinated approach to the regulation and supervisory treatment of new or innovative financial activities and provide advice to present to the EU institutions, market participants or consumers, and implement the framework for the use of the product intervention powers provided by MiFIR.

ESMA monitors financial activities and retail investor trends, with a particular focus on financial innovation including fintech and crypto assets. It identifies issues and/or risks connected to such activities and trends, and helps to co-ordinate NCAs initiatives on market monitoring and facilitating exchanges of best practices, including providing advice or making proposals of relevant actions where needed.

The monitoring also helps ESMA to play a proactive role in market intelligence gathering and to develop metrics that will guide the Authority in determining when and where ESMA will employ its own product intervention powers. Furthermore, the monitoring activity enhances the capacity to fulfill the responsibility to ensure that NCAs’ use of the powers is coordinated and coherent.

Main outputs are the ongoing monitoring of retail investor trends, financial activities and innovation, including fintech, and ongoing market intelligence gathering. The unit has a budget of six full-time staff and about €1.1 million (USD$1.3mn).

Read the full work program

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