The European Securities and Markets Authority (ESMA) has published a speech by Steven Maijoor, ESMA Chair, given to the European Parliament’s Economic and Monetary Affairs Committee as part of the annual hearing of the chairs of the three European Supervisory Authorities. The speech focussed on two important current topics for EU securities markets: MiFID II implementation and Brexit.

Key points of interest include:

  • on MiFID II, ESMA remains optimistic about its overall readiness to operate within the new framework by the implementation deadline of 3 January 2018. However, it also wants to draw attention to the size and complexity of this project, and thus the risk of potential glitches in the initial operational period;
  • on Brexit, ESMA has been looking closely at the areas where, if the UK leaves the EU without any arrangements in place, it could mean higher risks for investors and markets as a whole. Together with other relevant authorities, ESMA is working on possible mitigating actions. In addition, as a direct supervisor of credit rating agencies and trade repositories within the EU, with a number of entities headquartered in London, ESMA has requested appropriate contingency plans from individual supervised entities. Mr Maijoor also states that Brexit has triggered broader political discussions as to whether the current third country equivalence model is fit for purpose, and notes it is clear that some significant legislative changes need to be considered soon. Mr Maijoor welcomes the proposal to assign certain supervisory powers over third country central counterparties (CCPs) to ESMA, in particular in relation to CCPs having a significant impact on the stability of the EU financial market. In addition, Mr Maijoor suggests that assigning supervisory powers for ESMA towards non-EU trading venues could be considered.

Mr Maijoor concludes the speech by referring to the development of the capital markets union. In particular he refers to reporting and data collection and states that ESMA has put significant resources into building various reporting systems. He notes that these investment will particularly benefit ESMA’s risk analysis work.

View ESMA highlights MiFID II and Brexit preparations as key issues in speech, 9 October 2017