Verena Ross, Executive Director of the European Securities and Markets Authority (ESMA), gave a speech last week at the ICMA conference in Milan on ESMA’s priorities for the rest of 2012. While the speech contained no earth-shattering revelations or surprises, we thought it worthwhile to point out some quotes of interest.
“One of ESMA’s key activities is contributing to building a single rule book for the regulation of the EU’s financial markets and ensuring its consistent application at national level.”
– While each EU member-state still has its own national regulator, ESMA really does stand above the pack and can both coordinate member-states as well as initiate its own regulatory actions.
“The single rule book is a necessary tool to face the crisis and build a safer and efficient financial market, but it is not sufficient. It needs to be complemented by supervisory convergence in order to be fully and efficiently implemented on the ground.”
– The new short selling rules are a great example here. See our article of May 8 2012 for a more detailed review.
“Trade repositories will also soon be placed under ESMA’s direct authority, both for registration and supervision, as a result of the implementation of EMIR. Finally, ESMA will participate in the colleges that will govern the registration and supervision of CCPs in order to ensure effective functioning and consistency of these colleges.”
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ESMA delivered technical standards and technical advice for Short Selling
Earlier this year, the regulatory technical standards, the implementing technical standards and the technical advice on delegated acts were delivered on the regulation on Short Selling and certain aspects of Credit Default Swaps.
The main objectives of this regulation are to create a harmonised framework for coordinated action at European level, increase transparency and reduce risks. The new framework aims to prevent market fragmentation and ensure the smooth functioning of the internal market, while providing clear powers for regulators to act when necessary.
All the provisions will come into effect in November this year and with it greater scope for ESMA to coordinate actions in this area across the EU.”
– The EU short selling rules offer many opportunities for critique. Suffice to say here that ESMA is a major driver of these rules and will manage them going forward.
“Some other regulatory proposals have been introduced and are being discussed by the Council and the Parliament. They include a new proposal related to MIFID (EC proposal of Oct. 2011), Central Securities Depositary (EC proposal of March 2012) and the Market Abuse Directive (EC proposal of Oct 2011).”
– We have reviewed the CSD rule in particular and find it to be very important for the functioning of European markets.
The full speech is here.