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Date Ref. Title Section Type Download Info Summary Related Documents Translated versions
20/07/2011 2011/223 Press release- ESMA consults on systems and controls for highly automated trading , Press Release PDF
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09/12/2011 2011/431 Global regulators discuss OTC derivatives regulation , Press Release PDF
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Leaders and senior representatives of the authorities responsible for the regulation of the over-the-counter (OTC) derivatives markets in Canada, the European Union, Hong Kong, Japan, Singapore and the United Statesmet met yesterday in Paris.  
22/12/2011 2011/457 ESMA outlines future automated trading regime for trading platforms, investment firms and competent authorities , Press Release PDF
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24/02/2012 2012/128 ESMA readies guidelines on automated trading – application deadline starts , Press Release PDF
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ESMA today publishes the official translations of its final “Guidelines on systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities” (ESMA/2011/456), first published on 21 December 2011. High Frequency Trading (HFT) is one form of automated trading.   By having translated the guidelines into all the official languages of the EU, today’s publication triggers a transitional period of two months within which national supervisors have to declare whether they intend to comply with the guidelines or otherwise explain the reasons for non-compliance which would be made public by ESMA. According to the ESMA Regulation national supervisors have to make every effort to comply with the Guidelines.
11/01/2013 2013/13 ESMA and the EBA take action to strengthen Euribor and benchmark rate-setting processes , Press Release PDF
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14/02/2013 2013/215 ESMA issues first risk report on EU securities markets , Press Release PDF
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06/06/2013 2013/684 ESMA and the EBA publish final principles on benchmarks , , Press Release PDF
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20/09/2013 2013/1324 ESMA TRV: market conditions improve, as systemic risks persist Press Release PDF
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The European Securities and Markets Authority (ESMA) published today its Trends, Risks, Vulnerabilities (TRV) Report and a Risk Dashboard for the second quarter of 2013. The TRV examines the performance of securities markets in the first half of 2013, assessing both trends and risks in order to develop a comprehensive picture of systemic and macro-prudential risks in the EU, to assist both national and EU bodies in their risk assessments. ESMA’s TRV contributes to promoting financial stability and enhancing consumer protection by regularly looking into cross-border and cross-sector trends, risks and vulnerabilities, both at the wholesale and retail level. The TRV finds that EU securities markets and investment conditions in the EU have improved for a second quarter in a row since the 4th quarter of 2012, although systemic risk persisted at medium to high levels. Amongst other risk factors, uncertainty remained high due to concerns over funding sources, low interest rates and recent market fluctuations, resulting in increased market risk, while liquidity, credit and contagion risk continue to be significant. Steven Maijoor, ESMA Chair, said: “While the easing of stress in financial markets is a positive sign, systemic risks in the EU remain high and uncertainty in the international market environment has risen. Valuations in securities markets, volatility in fund flows, and continuity issues around financial benchmarks remain a matter of concern. Faced with these issues regulators and market participants should remain vigilant. “ESMA’s work on identifying those risks facing Europe’s securities markets is an important component in the European System of Financial Supervision’s efforts to foster recovery in its markets and promote financial stability.” The TRV identifies the following key trends for the first half of 2013 in EU securities markets: • Securities markets: market conditions improved moderately while issuance was subdued with equity prices declining and inter-bank lending increasing. The second quarter saw an increase in sovereign borrowing costs, and corporate bonds; covered bonds and securitised products were subdued; • Collective investments: asset managers benefited from improved market conditions, mainly driven by bond, equity or alternative funds whereas money market fund assets decreased. Overall, leverage remained moderate but capital inflows were volatile reflecting a decline in investor sentiment; and • Market infrastructures: trading on EU venues increased in early 2013. Central clearing of interest rate swaps continued to grow. Potential continuity issues around financial benchmarks give rise to concerns. Key risks identified in the Report, and published separately in the Risk Dashboard, include: • Liquidity risk: even though policy action helped to reduce liquidity risks in main market segments, others rose, leaving the overall liquidity risk at high levels; • Credit risk: securities markets in the EU saw a reduction in issuance volumes, mainly in asset classes with higher risk and longer maturities. Despite recent debt refinancing, overall credit risk remains high; • Market risk: equity and bond markets risks increased driven by rising concerns over the valuation of assets; and • Contagion risk: the risk of contagion between market segments remained unchanged, while the level of credit default swap exposures declined. In addition, the TRV presents in-depth analyses on four specific topics: • First evidence on the impact of the Short-Selling Regulation on securities markets; • Contagion risks and the network structure of EU CDS exposures; • Overview of the EU UCITS industry; and • Overview of bail-in and contingent capital securities. Next steps As part of its on-going market surveillance, ESMA publishes its TRV semi-annually, complemented by its quarterly risk dashboard.
22/05/2014 2014/557 ESMA consults on MiFID reforms , , Press Release PDF
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The European Securities and Markets Authority (ESMA) has launched the consultation process for the implementation of the revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). This is the first step in the process of translating the MiFID II/MiFIR requirements into practically applicable rules and regulations to address the effects of the financial crisis and to improve financial market transparency and strengthen investor protection.MiFID II/MiFIR introduces changes that will have a large impact on the EU’s financial markets, these include transparency requirements for a broader range of asset classes; the obligation to trade derivatives on-exchange; requirements on algorithmic and high-frequency-trading and new supervisory tools for commodity derivatives. It will also strengthen protection for retail investors through limits on the use of commissions; conditions for the provision of independent investment advice; stricter organisational requirements for product design and distribution; product intervention powers; and the disclosure of costs and charges.MiFID II/MiFIR contains over 100 requirements for ESMA to draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS), and to provide Technical Advice to the European Commission to allow it to adopt delegated acts. In order to ensure that MIFID II achieves its objectives in practice, ESMA is publishing the following documents:1.    Consultation Paper on MiFID/MiFIR Technical Advice – ESMA needs to deliver this advice to the European Commission by December 2014 and is therefore subject to a condensed consultation process for this paper; and2.    Discussion Paper on MiFID/MiFIR draft RTS/ITS – this will provide the basis for a further consultation paper on the draft RTS/ITS which is expected to be issued in late 2014/early 2015. The closing date for responses to both papers is Friday 1 August. Steven Maijoor, ESMA Chair, said:“The launch of today’s MiFID II/MiFIR consultation process is an important step in the biggest overhaul of financial markets regulation in the EU for a decade. The reform of MiFID is an integral part of the EU’s strategy to address the effects of the financial crisis and aims to bring greater transparency to markets and to strengthen investor protection. These changes are key to restoring trust in our financial markets.“We appreciate the magnitude of this exercise for stakeholders. We strongly encourage all those affected by these reforms to provide their views to ensure that we take them into account in our final proposals.”The main issues covered in the Discussion and Consultation Paper are divided into those addressing the structure, transparency and regulation of financial markets, and those aimed at strengthening investor protection.Financial Markets Structure, Transparency and RegulationThe main proposals in this area cover the following issues: enhanced transparency and trading obligations - increasing pre- and post-trade transparency for many categories of instruments, e.g. shares, ETFs, certificates, bonds and derivatives, limitations to trade shares OTC and new obligations to trade derivatives on trading venues; micro-structural issues – refining the definition of high frequency trading and direct electronic access and specifying the requirements for operating in the market using algorithmic techniques; data publication and access – issues related to the development of the consolidated tape including requirements for tape providers, approved publication arrangements and reporting mechanisms, and the definition of a reasonable commercial basis for data sales; and the access to CCPs,  trading venues and benchmarks; other organisational requirements for trading venues; and commodity derivatives – new regulatory tools, including position limits. Investor ProtectionThe main proposals relating to the improved protection of retail investors include technical advice on: inducements – new limitations on the receipt of commissions (inducements); independent advice – clearly distinguishing independent from non-independent advice; product governance – requirements on the manufacture and distribution of financial products including target market and risk identification; product intervention/banning - introducing powers for both ESMA and national regulators to prohibit or restrict the marketing and distribution of certain financial instruments; and improved information on costs and charges – requirements to provide clients with details of all charges related to their investment (relating to both the investment service and the financial instrument provided) so they can understand the overall cost and its effect on their investment’s return. In addition, the draft regulatory technical standards in the investor protection area relate to the authorisation of investment firms, passporting, and certain best execution obligations.Next StepsESMA will hold three public hearings about secondary markets, investor protection and commodity derivatives issues on Monday 7 and Tuesday 8 July. Further details on the hearings will be published on ESMA’s website. 2014/548 2014/549
19/12/2014 2014/1574 ESMA provides implementing rules for MiFID II , , Press Release PDF
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The European Securities and Markets Authority (ESMA) has published today its final technical advice (TA) and launches a consultation on its draft regulatory technical and implementing standards (RTS/ ITS) regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). Both ESMA’s TA and draft RTS translate the MiFID II/MiFIR requirements into practically applicable rules for market participants and national supervisors. The new regulatory framework aims at ensuring that secondary markets are fair, transparent and safe and that investors’ interests are safeguarded when being sold investment products. Steven Maijoor, ESMA Chair, said:“Today’s implementing rules on both secondary markets and investor protection issues reflect ESMA’s desire to achieve the best outcome for market users and investors, taking into account the extensive submissions received from our stakeholders. The advice now goes to the European Commission to use in preparation of its delegated legislation, while our technical standards are open for a second round of consultation. “Once fully implemented, MiFID II will have a significant impact on the EU’s securities markets, its users and infrastructure providers. It will bring greater transparency and improve the overall functioning of markets thus strengthening investors’ trust in the financial sector.”MiFID II to include most financial instruments, trading venues and techniquesMiFID II/MiFIR introduces changes to the functioning of secondary markets, including transparency requirements for a broad range of asset classes; the obligation to trade derivatives on trading venues; requirements for algorithmic and high-frequency-trading and new supervisory tools for commodity derivatives. The key proposals stemming from ESMA’s TA/draft RTS cover the following issues: •    increased trade transparency, for non-equity instruments, in particular bonds, derivatives, structured finance products and emission allowances;•    a trading obligation for shares and a double volume cap mechanism for shares and equity-like instruments, introducing a major change to the framework for trading these instruments in the Union;•    an obligation to trade derivatives on MiFID venues (regulated markets, multilateral (MTFs) or organised trading facilities (OTFs)) only, in line with G20 requirements;•    newly introduced position limits and reporting requirements for commodity derivatives;•    rules governing high frequency trading, imposing a strict set of organisational requirements on investment firms and trading venues;•    provisions regulating access to central counterparties (CCPs), trading venues and benchmarks, designed to increase competition in the Union; and•    requirements for a consolidated tape of trading data, including rules for tape providers, reporting,  publication and sales of data.MiFID II to improve investor protection ESMA’s TA proposes that the Commission adopts a number of measures that will further the protection of investors across the EU. The main proposals relating to the improved protection of investors, especially retail, include:•    clarifications about the circumstances in which portfolio managers can receive research from third parties;•    clarifications under which circumstances inducements meet the quality enhancement requirement for the provision of advice;•    requirements for investment firms manufacturing and/or distributing financial instruments and structured deposits to have product governance arrangements in place in order to assess the robustness of their manufacture and/or distribution;•    requirements for firms to provide clients with details of all costs and charges related to their investment, including cost aggregations, the timing of disclosure (ex-ante and ex-post); information to non-retail clients; the scope of firms subject to this obligation; information on the cumulative effect of costs on the return; •    organisational requirements for firms providing investments advice on an independent basis; and•    specification of powers for ESMA and national regulators with regards to prohibiting or restricting the marketing and distribution of financial instruments. Next stepsThe TA has been finalised following extensive consultations with stakeholders and will now be sent to the European Commission. ESMA’s draft RTS/ITS, already previously consulted upon, are open for public comment until 2 March 2015. In addition, an open hearing will be held in Paris on 19 February 2015. ESMA will use the input received from the consultations to finalise its draft RTS which will be sent for endorsement to the European Commission by mid-2015, its ITS by January 2016. MiFID II/ MiFIR and its implementing measures will be applicable from 3 January 2017.
11/03/2015 2015/562 Press release- ESMA sees continued tense securities market conditions , Press Release PDF
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01/04/2015 2015/674 Press release- ESMA launches centralised data projects for MiFIR and EMIR , Press Release PDF
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05/05/2015 JC/2015/02 ESAs- main risks to EU financial market stability have intensified , , Press Release PDF
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The Joint Committee of the European Supervisory Authorities (ESAs) published its fifth Report on Risks and Vulnerabilities in the EU Financial System. Overall, the report found that in the past six months, risks affecting the EU financial system have not changed in substance, but have further intensified. The EU’s economic performance improved slightly in early 2015, however the financial sector in general continues to be affected by a combination of factors such as low investment demand, economic uncertainty in the Eurozone and its neighbouring countries, a global economic slow-down and a low-interest rate environment. The main risks affecting the financial system remain broadly unchanged from those identified in the report’s previous edition, but have become more entrenched. The major risks include: • Low growth, low inflation, volatile asset prices and their consequences for financial entities; • Search for yield behaviour exacerbated by potential rebounds; • Deterioration in the conduct of business; and • Increased concern about IT risks and cyber-attacks. Despite these risks, a number of ongoing policy and regulatory initiatives are contributing to improving the stability and confidence in the financial system as well as facilitating additional funding channels to the real economy. These include ongoing regulatory reforms in the securities, banking and insurance sectors such as the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), the work on the implementation of the Capital Requirements Directive and Regulation (CRDIV/CRR), the work on the Bank Recovery and Resolution Directive (BRRD), the Deposit-Guarantee Schemes Directive (DGS) and the Solvency II Directive, as well as the European Commission’s plan for a Capital Markets Union (CMU). Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA) and the current Chairman of the Joint Committee, said: “The Joint Committee has noted some improvement in overall market conditions; however, the recovery is not yet sustained and is exposed to risks related to broad macroeconomic conditions, in particular the low interest environment and resulting search-for-yield behaviour. Additionally regulators continue to have concerns about the operational risks generated by some financial institutions’ inappropriate business conduct, as well as those risks posed by inadequate management of IT risks. “However, recent regulatory initiatives across the banking, insurance and securities sectors, such as the Comprehensive Assessment, the insurance sector stress test and Solvency II along with, the ongoing MiFID, EMIR and PRIPS reforms are contributing to improving the stability and confidence in the EU financial system." Key Risks Identified The identified risks in the Report can be divided into macro risks to the EU financial system and economy and operational risks. Macro Risks The key macro risks identified relate to: 1. Risks from weak economic growth and low inflation environment, which include: • Adverse effect that low interest rates and uncertainties about the economic recovery have had on the outlook for the financial industry; • Higher valuation and market liquidity risk has raised concerns about the outlook for financial entities’ stability in the event of reversals in interest rates and asset prices; 2. Low profitability is motivating financial institutions and other investors to search for yield, which requires increased supervisory attention to the viability of business models, related restructuring activity and adequate management of risks. However, the promotion of sound and innovative business models for market-based funding structures could help to deliver additional stimulus; and 3. Some continued doubts on the comparability and consistency of banks’ calculations of risk weighted assets. Operational Risks The key operational risks relate to: 4. Business conduct risk remains a key concern with the Report recommending that supervisors should include misconduct costs in future stress tests where appropriate, while financial institutions should strengthening product oversight and governance frameworks. Further improvements in the regulatory framework and supervisory practices to address conduct risks are also warranted. In addition, further progress needs to be made on benchmark reforms where continuity and integrity remain a source of concern even if key panels remained stable; and 5. IT operational risk and cyber risk remain of great concern and pose challenges to the the safety and integrity of financial institutions. IT risk increased due to costs pressures, outsourcing, the need for additional capacities and a mounting number of cyber-attacks. The adequate integration of IT risk into overall risk management is a key policy for mitigation.
14/09/2015 2015/1379 ESMA raises its market risk indicator to highest level , Press Release PDF
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05/02/2016 2016/247 ESMA to focus on governance, strategy, data and fees in 2016 supervision , , Press Release PDF
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The European Securities and Markets Authority (ESMA) has today published its 2016 supervisory priorities for credit rating agencies (CRAs) and trade repositories (TRs), as well as its annual report summarising the key supervisory work and actions undertaken during 2015.

2016 Supervisory Priorities

ESMA has seen a number of changes in the CRA and TR industries during 2015, with new applicants for registration in both sectors, and current authorised entities seeking to develop their businesses. This has included CRAs providing credit ratings on new asset classes or in new geographic areas, and TRs offering trade reporting services for other instrument types.

ESMA identifies its supervisory priorities on the basis of risk assessment exercises conducted throughout the year. In 2015 these identified high levels of governance and strategy risk, and operational risk in the CRA industry and high levels of risk associated with TRs’ data and systems. Therefore, in 2016 ESMA will focus its supervisory activities on:

  • CRA governance and strategy and the quality of credit ratings;
  • TR data quality and data access;
  • Fees charged and information security for all supervised entities.

Steven Maijoor, ESMA Chair, said:

“The credit rating and trade repository industries continue to evolve and develop. We are receiving new applications for registration and existing entities are seeking to develop their businesses by expanding into new areas. ESMA supports these developments where they contribute to the maintenance of stable and orderly financial markets.

“For this reason, in 2016 ESMA will focus its work on the quality of the services being provided by supervised entities. This means we will concentrate on issues surrounding CRA governance, strategy and ratings quality, along with data quality and access to TRs’ data with a broad focus on the fee structures and information security in both industries.”

2015 Annual Supervisory Review – CRAs and TRs

In 2015, following its risk-based approach, ESMA focused its supervisory efforts on CRAs’ governance, risk management and internal decision making and on CRAs’ business development processes. Some notable achievements were:

  • investigating the techniques being applied to validate credit rating methodologies by some CRAs and using the differences identified to encourage industry-wide debate about appropriate validation standards;
  • conducting an IT risk assessment which identified that CRAs are facing serious risks in several areas including IT operations and information security;
  • investigating the process of issuing credit ratings followed by one CRA and raising concerns about the preparation of issue ratings, the workloads of credit rating analysts and their involvement in the provision of ancillary services; and
  • concluding an enforcement case against DBRS Ratings Ltd for internal control failings and imposing a €30,000 fine for past record-keeping breaches. The case highlighted the need for CRAs to establish clear decision-making procedures, organisational structures and effective compliance functions.

The key risks TR supervision focused on in 2015 related to the quality of TRs’ data, access to data held by TRs and the operation and performance of TRs’ systems. In 2015, ESMA continued working with TRs to implement the data quality action plan established in September 2014 including:

  • harmonising TRs’ data validation;
  • monitoring the inter-TR reconciliation process; and
  • ensuring the harmonisation of the aggregate data made available on TRs’ websites.

ESMA has also been monitoring National Competent Authorities’ (NCAs) access to TR data. It has entered into a number of Memoranda of Understanding (MoUs) to help third country regulatory authorities access TR data and is developing an IT system to allow NCAs to submit data queries through a centralised web portal.

17/03/2016 2016/366 ESMA maintains market risk indicator at highest level , Press Release PDF
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31/03/2016 2016/468 ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures , Press Release PDF
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ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures

The European Securities and Markets Authority (ESMA) has fined the trade repository DTCC Derivatives Repository Limited (DDRL) €64,000, and issued a public notice, for negligently failing to put in place systems capable of providing regulators with direct and immediate access to derivatives trading data. This is a key requirement under the European Markets and Infrastructure Regulation (EMIR) in order to improve transparency and facilitate the monitoring of systemic risks in derivatives markets.

This is the first time ESMA has taken enforcement action against a trade repository registered in the European Union (EU). DDRL is the largest EU registered trade repository.

ESMA found that DDRL failed to provide direct and immediate access to derivatives data from 21 March 2014 to 15 December 2014, a period of about nine months in which access delays increased from two days to 62 days after reporting and affected 2.6 billion reports. This was due to its negligence in:

  • failing to put in place data processing systems that were capable of providing regulators with direct and immediate access to reported data;
  • failing, once they became aware, to inform ESMA in a timely manner of the delays that were occurring; and
  • taking three months to establish an effective remedial action plan even while delays were worsening.

DDRL’s failures caused delays to regulators accessing data, revealed systemic weaknesses in its organisation particularly its procedures, management systems or internal controls and negatively impacted the quality of the data it maintained.

04/04/2016 2016/566 ESMA not to exempt ETD under MiFID II , Press Release PDF
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02/05/2016 2016/566 Press release MiFID II RTS , Press Release PDF
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30/05/2016 2016/742 ESMA issues opinion on MiFID II standards on ancillary activities , Press Release PDF
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