ESMA prioritises sustainability, CMU and digitalisation for 2022
28 September 2021 EU
Image: AdobeStock/ingusk
The European Securities and Markets Authority (ESMA) has today published its annual working programme (AWP) for 2022.
This schedule, which details the work plan for the EU securities market regulator for the coming 12 months, will centre on sustainable finance, digitisation and the EU’s Capital Markets Union (CMU) project.
ESMA says that the 2022 AWP has been published at a time of major change for the authority, in light of being granted new powers and responsibilities, witnessing senior management changes and an increase in staff numbers.
At the heart of its key workstreams, ESMA will concentrate on contributing to the EU’s development agenda, including the regulatory and supervisory framework supporting European capital markets and the CMU.
This will include work on the European single access point, on the European Commission’s efforts to facilitate access for small and medium-sized enterprises to public markets, and steps to encourage stable and orderly retail investment.
ESMA will support the advance of sustainable finance in the EU, overseeing rules on ESG disclosures and risk identification methodologies for ESG, as well as working with national regulators to combat the threat of greenwashing.
The authority will also facilitate digitalisation and innovation programmes within the EU, contributing to the implementation of the Digital Operational Resilience Act, the Markets in Crypto Assets Regulation (MiCA) and regulation of a pilot regime for market infrastructure based on distributed ledger technology.
Other ESMA workstreams will focus on supervisory convergence, risk assessment, efforts to promote a single EU rulebook, and direct supervision of credit ratings agencies and trade repositories.
The risk assessment stream will strengthen risk identification initiatives with national competent authorities and international public authorities, supporting stress testing for risk identification and supervisory responses to financial stability risks.
The supervisory convergence group will promote a risk-based, consistent and co-ordinated approach to financial supervision within the EU.
ESMA’s single rulebook workstream will contribute to reviews of the Prospectus and Transparency Directives, the second Markets in Financial Instruments Directive and its associated regulation (MiFID II/MiFIR), the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs), the Short Selling Regulation and the Central Securities Depository Regulation (CSDR).
ESMA will also continue to prioritise areas where it has been trusted with supervisory responsibilities, specifically for credit rating agencies and trade repositories. However, in 2022, it will focus on new entities falling under its direct supervision, including critical benchmarks, data reporting service providers and Tier 2 central counterparties. It will also play a central role in the oversight of central market infrastructure.
Commenting on the 2022 AWP, ESMA executive director Natasha Cazenave, says: “ESMA faces another year of change and challenge in 2022, with new supervisory powers for benchmarks and data service providers, significant contributions expected to support the EU’s priorities through a single rulebook and supervisory convergence work and further enhancements to our role as an EU capital markets data hub.”
“This is an ambitious work schedule that aims to respond to the challenges faced by the EU, its capital markets, and its citizens.
“This includes developing the retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, and dealing with the opportunities and risks posed by digitalisation and innovation in the financial sector.”
This schedule, which details the work plan for the EU securities market regulator for the coming 12 months, will centre on sustainable finance, digitisation and the EU’s Capital Markets Union (CMU) project.
ESMA says that the 2022 AWP has been published at a time of major change for the authority, in light of being granted new powers and responsibilities, witnessing senior management changes and an increase in staff numbers.
At the heart of its key workstreams, ESMA will concentrate on contributing to the EU’s development agenda, including the regulatory and supervisory framework supporting European capital markets and the CMU.
This will include work on the European single access point, on the European Commission’s efforts to facilitate access for small and medium-sized enterprises to public markets, and steps to encourage stable and orderly retail investment.
ESMA will support the advance of sustainable finance in the EU, overseeing rules on ESG disclosures and risk identification methodologies for ESG, as well as working with national regulators to combat the threat of greenwashing.
The authority will also facilitate digitalisation and innovation programmes within the EU, contributing to the implementation of the Digital Operational Resilience Act, the Markets in Crypto Assets Regulation (MiCA) and regulation of a pilot regime for market infrastructure based on distributed ledger technology.
Other ESMA workstreams will focus on supervisory convergence, risk assessment, efforts to promote a single EU rulebook, and direct supervision of credit ratings agencies and trade repositories.
The risk assessment stream will strengthen risk identification initiatives with national competent authorities and international public authorities, supporting stress testing for risk identification and supervisory responses to financial stability risks.
The supervisory convergence group will promote a risk-based, consistent and co-ordinated approach to financial supervision within the EU.
ESMA’s single rulebook workstream will contribute to reviews of the Prospectus and Transparency Directives, the second Markets in Financial Instruments Directive and its associated regulation (MiFID II/MiFIR), the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs), the Short Selling Regulation and the Central Securities Depository Regulation (CSDR).
ESMA will also continue to prioritise areas where it has been trusted with supervisory responsibilities, specifically for credit rating agencies and trade repositories. However, in 2022, it will focus on new entities falling under its direct supervision, including critical benchmarks, data reporting service providers and Tier 2 central counterparties. It will also play a central role in the oversight of central market infrastructure.
Commenting on the 2022 AWP, ESMA executive director Natasha Cazenave, says: “ESMA faces another year of change and challenge in 2022, with new supervisory powers for benchmarks and data service providers, significant contributions expected to support the EU’s priorities through a single rulebook and supervisory convergence work and further enhancements to our role as an EU capital markets data hub.”
“This is an ambitious work schedule that aims to respond to the challenges faced by the EU, its capital markets, and its citizens.
“This includes developing the retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, and dealing with the opportunities and risks posed by digitalisation and innovation in the financial sector.”
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