ESMA work program

**2021**

ESMA work program for 2021

On Friday 2 October, the European Securities and Markets Authority (ESMA) published its Work Program for 2021 - a pivotal year for ESMA with its Chair, Steven Maijoor, and its Executive Director, Verena Ross, both set to leave, and Europe’s largest financial market (the UK) sitting outside of its remit. Critically, 2021 will see ESMA take on increased supervisory powers for central counterparties, benchmarks and securitisation repositories, while much of its single rulebook and supervisory convergence work will need to focus on the development of the Capital Markets Union, and addressing the impact of both COVID-19 and Brexit on the EU’s markets and investors.

Please see here for the IA’s detailed circular outlining the specific actions of ESMA work program.

Here are the main elements of ESMA’s 2021 work program

1. Promoting supervisory convergence:

Focusing on fund liquidity risk and liquidity management tools, retail investment products costs and performance, quality and usability of data, supervision of ESG reporting and ESG data usage, and the implementation of EMIR. Work will continue on ESMA’s use of peer reviews on supervision of cross-border activities, NCAs’ handling of relocation to the EU27 due to Brexit, supervision of CCPs, supervision of CSDs, and on the scrutiny and approval procedures of prospectuses;

2. Assessing risks to investors, markets, and financial stability:

Given the uncertainty in the markets caused by the COVID-19 pandemic, ESMA will place an increased emphasis on integrating financial innovation and ESG into its risk analysis. ESMA will also look to improve the use of data to support its risk-based approach to supervision and to support its other policy and convergence work;

3. Completing a single rulebook for EU financial markets:

During 2021, priority areas include reviews of MiFID and AIFMD and identifying rulebook changes in support of the CMU. Additionally, following the EMIR Refit changes, ESMA intends on reviewing technical standards which, depending on market developments, may include clearing thresholds and obligations. ESMA is still considering the final RTS which will apply to UK-based firms seeking to rely on any future equivalence decision under MiFIR;

4. Directly supervising financial entities:

Recognising the increase supervisory role for ESMA as a result of the ESA Review, ESMA confirms during 2021 it will focus on third-country central counterparty supervision as critical financial market infrastructures under EMIR 2.2 and prepare for the new supervisory mandates regarding Benchmarks and Data Service Providers.