On 25 July 2022, the European Securities and Markets Authority (ESMA) published an opinion on the 2020 Discharge Report of the European Parliament (EP).
In the opinion, ESMA states that it welcomes the approval by the EP of the closure of its accounts for the financial year 2020 and the decision of the EP to grant ESMA’s Executive Director discharge in respect of the implementation of ESMA’s budget for the financial year in 2020. In addition, in the document ESMA shares a number of comments on the EP resolution of 4 May 2022, and in particular EP’s observations, forming an integral part of the decision on discharge in respect of the implementation of ESMA’s budget for the financial year 2020. These comments include the following:
Budget and Financial Management
- ESMA confirms that, following the European Court of Auditor’s comments, it has upgraded its late payment management system, the new version being applied from 2021. ESMA has put in place: (i) regular internal automated reporting on accumulated late payments; (ii) internal work instructions on the establishment of the receivable amounts and on the criteria for the assessment of the potential waivers per all revenue sources; and (iii) a specific electronic workflow facilitating timely, substantiated, and formal decision-making with regards to the accrued interests.
- ESMA states that it strives to carry out its direct supervisory mandates applying a risk based approach. This is aimed at supporting ESMA in directing its supervisory resources to areas where the greatest risks lie, and to adapt its supervisory efforts to the evolving nature of the financial markets, with the ultimate goal of ensuring investor protection and stable and orderly markets.
- On the European Court of Auditors’ request to adjust National Competent Authorities’ estimation-based pension contributions for year N to actual figures, ESMA underlines that it will continue to comply with the European Commission’s guidelines on “employers’ contribution from partially self-financed agencies to the pension scheme”.
- ESMA welcomes the EP’s positive appraisal of the comprehensive set of measures that it has taken to improve its budgeting and performance management.
- In light of the financial market impact of the Russian invasion of Ukraine, which has affected ESMA’s workload since the publication of it 2022 Annual Work Program, ESMA draws the attention of the EP to the reprioritisation exercise it has conducted to ensure that its resources are appropriately allocated.
- ESMA acknowledges that, as a consequence of the impact of the COVID-19 pandemic, it has completed only 81.5 % of the activities included in its annual work programme in 2020. ESMA stresses however that the set of decisions it made and the series of actions it undertook in 2020 in close coordination with national, European, and international authorities at the time of the market stress caused by COVID-19, allowed the avoidance of severe damage to financial stability and detriment to investors, while maintaining high work standards and high quality outputs in the remaining planned activities.
Staff policy, prevention & management if conflicts of interest, and transparency
- ESMA notes the renewed EP’s acknowledgement of ESMA’s track record with regards to gender balance, both at management and staff levels. ESMA will continue to duly consider, in the recruitment of new staff and in connection with promotions, the candidates’ skills, knowledge and experience and it also intends to develop a “Diversity and Inclusion Policy”, which it aims to include in its HR Strategy and Roadmap for the coming years.
- ESMA welcomes the positive assessment of the EP on its practices to prevent and manage conflicts of interest, and to improve transparency.
- ESMA stresses that, following the findings of the European Court of Auditors, it has adopted several preventive actions in order to strengthen the internal controls with regards to consultancy services under its framework contracts.
- ESMA states that, based on the conclusions of the Internal Audit Service of the European Commission (IAS), it has successfully migrated its activity-based management model from an Excel-based system to a new cloud based environment called Anaplan.