The European Securities and Markets Authority (ESMA) has published a speech given by its chairman, Steven Maijoor. The speech is entitled Review of the European Supervisory Authorities: Opportunities to ensure a safe and sound financial system.

At the beginning of his speech Mr Maijoor provides a high level assessment of ESMA’s performance since its establishment six years ago. He then discusses areas for possible improvement being:

• the process and timing of the various stages of making draft technical standards;
• ESMA needs to have an instrument similar to no-action letters as the time required for changing technical standards is sometimes too long; and
• ESMA needs to have the power to impose higher fines on supervised entities.

In the remainder of his speech Mr Maijoor focuses on supervisory convergence, noting that since ESMA’s establishment convergence tools have improved but still remain too week.

He also states that in his opinion the EU third country framework needs to be overhauled. He states:

“Therefore, we need to rethink and overhaul the framework for third countries in financial markets legislation. The point of departure should stay the same: achieving consistent regulation and supervision of global financial markets, and strengthening the EU as a stable global financial region. An important element to consider in such a new system is ensuring that risks posed by the activities of third country entities in the EU can be adequately assessed and addressed. This is especially relevant the bigger the third country’s financial markets and the more interconnected with the EU’s financial markets. A final consideration is that the risk of regulatory competition is reduced when execution of the third country framework is conducted at EU level.”

View ESMA speech on review of ESAs and EU third-country framework, 9 February 2017