On the 15th June 2015, the European Securities and Markets Authority (ESMA) published its strategy for 2016-2020. As ESMA is moving from its formative years to the next phase, a strategic review was conducted to set the new direction and priorities of ESMA within this changing environment. This strategic review also took into account various external evaluations.
In addition, ESMA published its annual report for 2014, reporting on the achievements of its third year in existence.
Under its new strategy, ESMA’s focus will now shift from rulemaking towards the implementation of rules and ensuring the convergence of supervisory practices
Under its new strategy, ESMA’s focus will now shift from rulemaking towards the implementation of rules and ensuring the convergence of supervisory practices. ESMA also expects that new regulatory work may follow from current initiatives such as the Capital Markets Union. In order to streamline its activities, ESMA’s new strategy focuses on three key objectives:
- Investor protection: to have the needs of financial consumers better served and to reinforce their rights while acknowledging their responsibilities;
- Orderly markets: to promote the integrity, transparency, efficiency, and well-functioning of the EU’s financial markets and robust market infrastructures; and
- Financial stability: to strengthen the financial system in order to withstand shocks.
ESMA’s three objectives will be achieved through four activities, which ESMA will focus on in the coming years:
- Assessing risks to investors and financial stability:
ESMA will increase its resources to strengthen its capabilities to identify and assess risks to investors, and financial stability in the EU.
- Promoting supervisory convergence:
ESMA will commit more resources to promote supervisory convergence and target a number of specific areas where convergence is to be promoted. To achieve convergence, a broad range of instruments will be used.
- Direct supervision of specific financial entities:
ESMA will continue to strengthen its role as a direct supervisor, whilst intensifying its risk-based approach in order to achieve lasting impact. Overall, the enforcement process is to become more effective and efficient.
- Completing a single rulebook for EU financial markets:
Given ESMA’s shift in focus, it will decrease its resources committed to completing the single rulebook compared to its first years of existence.
The new ESMA strategy will also be accompanied by some organisational changes such as merging of all supervisory activities in one Department and bringing together most of ESMA’s data and risk analysis capacity, as well as streamlining its cooperation and stakeholder functions.