ESMA to focus on risks and fair fees in 2015
17 February 2015 Paris
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The European Securities and Markets Authority (ESMA) will prioritise minimising systemic risk for credit rating agencies (CRAs) in 2015 and 16, while investigating data quality and fees charged by trade repositories (TRs).
In its annual report on direct supervisory activities in 2014, ESMA outlined the key actions taken in the last 12 months as well as those in the pipeline.
For CRAs in 2014, ESMA concluded an investigation in to structured finance ratings and a review of small and medium-sized agencies. It also issued its first enforcement ruling for internal control failings under the CRA regulation.
On top of this, it began conducting work on sovereign ratings while enhancing its risk-based approach to supervision, focusing on the issues that have most effect on the quality of credit ratings.
In 2015, ESMA will continue to tackle systemic risks by minimising conflicts of interest in the ratings process, looking in to the review and validation of ratings methodologies.
It will also focus on IT controls and information security in CRAs, and follow up on investigations on structured finance and small to medium-sized enterprises to ensure smooth implementation of plans.
Since derivatives reporting for TRs started in February 2014, almost 10 billion reports have been received and processed by the six registered repositories, and there are about 5,000 entities with direct reporting agreements. As of January 2015, there were about 300 million trade reports submitted on a weekly basis.
ESMA’s supervisory focus has now shifted to the quality of the data, ensuring that regulators have access to that data, and the scale and complexity of TR systems and the data they receive.
In 2015, it will concentrate on the relation between costs to the TRs and customer fees, while also looking at business continuity planning and Inter-TR reconciliation processes.
Individual reviews and investigations will also be completed. These will focus on TR systems software development lifecycles, data availability and regulators’ access to TRs, and the confidentiality of data.
In its annual report on direct supervisory activities in 2014, ESMA outlined the key actions taken in the last 12 months as well as those in the pipeline.
For CRAs in 2014, ESMA concluded an investigation in to structured finance ratings and a review of small and medium-sized agencies. It also issued its first enforcement ruling for internal control failings under the CRA regulation.
On top of this, it began conducting work on sovereign ratings while enhancing its risk-based approach to supervision, focusing on the issues that have most effect on the quality of credit ratings.
In 2015, ESMA will continue to tackle systemic risks by minimising conflicts of interest in the ratings process, looking in to the review and validation of ratings methodologies.
It will also focus on IT controls and information security in CRAs, and follow up on investigations on structured finance and small to medium-sized enterprises to ensure smooth implementation of plans.
Since derivatives reporting for TRs started in February 2014, almost 10 billion reports have been received and processed by the six registered repositories, and there are about 5,000 entities with direct reporting agreements. As of January 2015, there were about 300 million trade reports submitted on a weekly basis.
ESMA’s supervisory focus has now shifted to the quality of the data, ensuring that regulators have access to that data, and the scale and complexity of TR systems and the data they receive.
In 2015, it will concentrate on the relation between costs to the TRs and customer fees, while also looking at business continuity planning and Inter-TR reconciliation processes.
Individual reviews and investigations will also be completed. These will focus on TR systems software development lifecycles, data availability and regulators’ access to TRs, and the confidentiality of data.
NO FEE, NO RISK
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