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Date Ref. Title Section Type Download Info Summary Related Documents Translated versions
20/09/2013 2013/1138 Trends, Risks, Vulnerabilities No. 2, 2013 Final Report PDF
2.92 MB
20/09/2013 2013/1324 ESMA TRV: market conditions improve, as systemic risks persist Press Release PDF
149.46 KB
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.
21/10/2013 Ares(2013)3304576 REQUEST TO ESMA FOR TECHNICAL ADVICE ON POSSIBLE DELEGATED ACTS CONCERNING THE REGULATION ON INSIDER DEALING AND MARKET MANIPULATION (MARKET ABUSE) ((EC)No XX/2013) , Reference PDF
56.55 KB
REQUEST TO ESMA FOR TECHNICAL ADVICE ON POSSIBLE DELEGATED ACTS CONCERNING THE REGULATION ON INSIDER DEALING AND MARKET MANIPULATION (MARKET ABUSE) ((EC)No XX/2013)
14/11/2013 2013/1649 ESMA’s policy orientations on possible implementing measures under the Market Abuse Regulation , Consultation Paper PDF
950.26 KB
The European Securities and Markets Authority (ESMA) has published a Discussion Paper setting out its initial views on the implementing measures it will have to develop for the new Market Abuse Regulation (MAR). MAR aims to enhance market integrity and investor protection. It will achieve this by updating and strengthening the existing market abuse framework, by extending its scope to new markets and trading strategies, and by introducing new requirements. The Discussion Paper presents positions and regulatory options on those issues where ESMA will have to develop MAR implementing measures, likely to include Regulatory Technical Standards, Delegated Acts and Guidelines. These implementing measures are of fundamental importance to the new regime, as they set out how MAR’s enlarged scope is to be implemented in practice by market participants, trading platforms, investors, issuers and persons related to financial markets. In developing these regulatory options ESMA, where similar requirements already exist under the current Market Abuse Directive (MAD), has taken into consideration the existing MAD Level 2 texts and ESMA/CESR guidelines to set out the DP positions in light of the extended scope of MAR. This Discussion Paper is based on the version of the MAR Level 1 text agreed by the European Parliament, the Council and the European Commission on 24 June 2013. Consultation Reference 2013/1649 Closing date for responses Monday, 27 January 2014 Contact market.integrity[at]esma.europa.eu
14/11/2013 2013/1650 ESMA begins preparatory work for new Market Abuse Regime , , Press Release PDF
95.26 KB
ESMA begins preparatory work for new Market Abuse Regime The European Securities and Markets Authority (ESMA) has published a Discussion Paper setting out its initial views on the implementing measures it will have to develop for the new Market Abuse Regulation (MAR). MAR aims to enhance market integrity and investor protection. It will achieve this by updating and strengthening the existing market abuse framework, by extending its scope to new markets and trading strategies, and by introducing new requirements. The Discussion Paper presents positions and regulatory options on those issues where ESMA will have to develop MAR implementing measures, likely to include Regulatory Technical Standards, Delegated Acts and Guidelines. These implementing measures are of fundamental importance to the new regime, as they set out how MAR’s enlarged scope is to be implemented in practice by market participants, trading platforms, investors, issuers and persons related to financial markets. In developing these regulatory options ESMA, where similar requirements already exist under the current Market Abuse Directive (MAD), has taken into consideration the existing MAD Level 2 texts and ESMA/CESR guidelines to set out the DP positions in light of the extended scope of MAR. This Discussion Paper is based on the version of the MAR Level 1 text agreed by the European Parliament, the Council and the European Commission on 24 June 2013. The closing date for responses is Monday 27 January 2014. MAR Policy Areas The DP covers ten sections of MAR where ESMA is expected to have to provide input, these include: • conditions to be met by buyback programmes and stabilization measures to benefit from the exemption from market abuse prohibitions; • arrangement and procedures required for market soundings, from the perspective of both the sounding and the sounded market participants; • indicators and signals of market manipulation; • criteria to establish Accepted Market Practices; • arrangement, systems and procedures to put in place for the purpose of suspicious transactions and order reporting as well as its content and format; • issues relating to public disclosure of inside information and the conditions for delay; • format for insider lists; • issues concerning the reporting and public disclosure of managers’ transactions; • arrangements for fair presentation and disclosure of conflicts of interests by producers and disseminators of investment recommendations; • reporting of violations and related procedures. Next steps ESMA will consider the feedback it receives to this consultation in Q1 2014 and incorporate it in to its full consultation papers on both its draft Technical Standards and Technical Advice to the Commission. The dates for these consultations are will depend on the publication of the final version of MAR. Notes for editors 1. 2013/1649 Discussion Paper - ESMA’s policy orientations on possible implementing measures under the Market Abuse Regulation 2. Proposal for a Regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) (MAR) 3. ESMA is an independent EU Authority that was established on 1 January 2011 and works closely with the other European Supervisory Authorities responsible for banking (EBA), and insurance and occupational pensions (EIOPA), and the European Systemic Risk Board (ESRB). 4. ESMA’s mission is to enhance the protection of investors and promote stable and well-functioning financial markets in the European Union (EU). As an independent institution, ESMA achieves this aim by building a single rule book for EU financial markets and ensuring its consistent application across the EU. ESMA contributes to the regulation of financial services firms with a pan-European reach, either through direct supervision or through the active co-ordination of national supervisory activity. Press Release 2013/1650 Discussion Paper 2013/1649
15/11/2013 2013/1454 ESMA Risk Dashboard No.4, 2013 Final Report PDF
1.12 MB
The European Securities and Markets Authority (ESMA) is publishing its Risk Dashboard No.4 for 2013. The Risk Dashboard provides a snapshot of risk issues in the third quarter of 2013 and covers the following areas: Economic environment and securities markets conditions; Liquidity Risk; Market Risk; Contagion Risk; and Credit Risk.
28/02/2014 2014/205 Call for expressions of interest: Group of Economic Advisers for ESMA’s Committee for Economic and Markets Analysis Reference PDF
158.95 KB
The European Securities and Markets Authority (ESMA) is seeking to appoint new members to its Group of Economic Advisors (GEA) for the Committee for Economic and Markets Analysis (CEMA). This follows the expiry of the term of the current GEA. CEMA has established the GEA in order to benefit from the expertise of stakeholders specialised in the topics of financial stability and general economic research related to financial markets. CEMA looks to this group to provide it with advice regarding our work related to financial stability and economic background analysis for the regulatory and supervisory tasks of ESMA. The closing date for application is 25 April 2014.  Application form
12/03/2014 2014/197 ESMA Risk Dashboard No.1, 2014 Final Report PDF
743.09 KB
12/03/2014 2014/188 Trends, Risks, Vulnerabilities No. 1, 2014 Final Report PDF
2.33 MB
27/03/2014 2014/332 Structured Retail Products- Good practices for product governance arrangements , Opinion PDF
203.1 KB
Legal basis 1.    Regulation (EU) No 1095/2010 (ESMA Regulation)  sets out the European Securities and Markets Authority’s (ESMA) scope of action, tasks and powers which include “enhancing customer protection”, and “foster[ing] investor protection”.  2.    In order to continue delivering on this investor protection statutory objective, ESMA is issuing this opinion on certain aspects linked to the manufacturing and distribution of structured retail products (SRP). This opinion takes into account relevant work done in this field both at European and interna-tional level.  3.    This opinion is without prejudice to the requirements for the provision of investment services and activities established in the Markets in Financial Instruments Directive (MiFID)  and its implementing measures (notably, Directive 2006/73/EC), the regulatory developments arising from the MiFID review or existing product rules that may apply to SRPs.  4.    ESMA’s competence to deliver an opinion is based on Article 29(1) (a) of the ESMA Regulation. In accordance with Article 44(1) of the ESMA Regulation, the Board of Supervisors has adopted this opinion. Background 5.    In its July 2013 report on ‘Retailisation in the EU’ , ESMA highlighted that, from a consumer protec-tion perspective, retail investors may face difficulties in understanding the drivers of risks and returns of structured products. If retail investors do not properly understand the risk and reward profile of structured products, and if the products are not properly assessed against the risk appetite of retail investors, retail investors might be exposed to unexpected losses and this might lead to complaints, reputational risks for manufacturers and distributors, and a loss of confidence in the regulatory framework and, more broadly, in financial markets. 6.    In 2013, ESMA mapped the measures adopted in the EU Member States in relation to complex products in order to identify issues and to better understand the rationale behind national initiatives (by looking at similarities and differences in the various approaches, and reviewing how complexity has been treated in the different EU Members States). 7.    As a result, ESMA has developed a broad set of non-exhaustive examples of good practices, attached as Annex 1 hereto, illustrating arrangements that firms - taking into account the nature, scale and complexity of their business - could put in place to improve their ability to deliver on investor protection regarding, in particular, (i) the complexity of the SRPs they manufacture or distribute, (ii) the nature and range of the investment services and activities undertaken in the course of that business, and (iii) the type of investors they target. These good practices should also be a helpful tool for competent authorities in carrying out their supervisory action. Opinion 8.    ESMA considers that sound product governance arrangements are fundamental for investor protec-tion purposes, and can reduce the need for product intervention actions by competent authorities. 9.    ESMA considers that, when supervising firms manufacturing or distributing an SRP, competent authorities should promote, in their supervisory approaches, the examples of good practices for firms set out in Annex 1 hereto. 10.    Although the good practices set out in Annex 1 hereto focus on structured products sold to retail investors, ESMA considers that they may also be a relevant reference for other types of financial in-struments (such as asset-backed securities, or contingent convertible bonds), as well as when financial instruments are being sold to professional clients. 11.    The exposure to risk is an intrinsic feature of investment products. The good practices set out in Annex 1 refer to product governance arrangements and do not (and cannot) aim at removing investment risk from products.
27/03/2014 2014/334 ESMA issues good practices for structured retail product governance , Press Release PDF
105.37 KB
The European Securities and Markets Authority (ESMA) has published an opinion on structured retail products, setting out good practices for firms when manufacturing and distributing these products.
16/05/2014 2014/536 ESMA Risk Dashboard No.2, 2014 Final Report PDF
782.65 KB
11/06/2014 ESMA/WP/2 ESMA Working Paper- The systemic dimension of hedge fund illiquidity and prime brokerage Reference PDF
839.63 KB
We analyse the potentially vulnerable and systemically relevant financial intermediation chain established by hedge funds and prime brokers. Our dataset covers the 306 largest global hedge funds and their prime brokers over the period July 2001 to December 2011. The study illustrates that hedge funds and prime brokers act as complementary trading partners in normal times. However, we observe that this form of financial intermediation may be severely impaired in times of market distress. This can be explained by the hoarding of liquid securities by prime brokers who are eager to avert runs by their clients.
11/06/2014 ESMA/WP/1 ESMA Working Paper- Monitoring the European CDS market through networks: Implications for contagion risks Reference PDF
1005.17 KB
Based on a unique data set referencing exposures on single name credit default swaps (CDS) on European reference entities, we study the structure and the topology of the European CDS market and its evolution from 2008 to 2012, resorting to network analysis. The structural features revealed show bilateral CDS exposures describing growing scale-free networks whose highly interconnected hubs constitute both a strength and weakness for the stability of the system. The potential “super spreaders” of financial contagion, identified as the most interconnected participants, consist mostly of banks. For some of them net notional exposures may be particularly large relative to their total common equity. Our findings also point to the importance of some non-dealer/non-bank participants belonging to the shadow banking system.
15/07/2014 2014/809 Consultation Paper- Draft technical standards on the Market Abuse Regulation (MAR) Consultation Paper PDF
1.64 MB
  ESMA invites comments on all matters in this paper and in particular on the specific questions summarised in Annex 1.Comments are most helpful if they: respond to the question stated; indicate the specific question to which the comment relates; contain a clear rationale; and describe any alternatives ESMA should consider. ESMA will consider all comments received by Wednesday 15 October 2014.All contributions should be submitted online at www.esma.europa.eu under the heading ‘Your input - Consultations’.Publication of responsesAll contributions received will be published following the close of the consultation, unless you request otherwise. Please clearly and prominently indicate in your submission any part you do not wish to be publically disclosed. A standard confidentiality statement in an email message will not be treated as a request for non-disclosure. A confidential response may be requested from us in accordance with ESMA’s rules on access to documents. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by ESMA’s Board of Appeal and the European Ombudsman.Data protectionInformation on data protection can be found at www.esma.europa.eu under the heading ‘Legal Notice’.Who should read this paper?This paper may be specifically of interest to any investor that deals in financial instruments and emission allowances subject to the Market Abuse Regulation, issuers of instruments in the scope of the Regulation, financial intermediaries, operators of trading venues and participants in the emission allowance market.
15/07/2014 2014/808 Consultation Paper- Draft technical advice on possible delegated acts concerning the Market Abuse Regulation (MAR) Consultation Paper PDF
656.69 KB
The European Securities and Markets Authority (ESMA) invites comments on all matters set out in this consultation paper and, in particular, on the specific questions listed in Annex I. Comments are most helpful if they: indicate the number of the question to which the comment relates; respond to the question stated; contain a clear rationale, including on any related costs and benefits; and describe any alternatives ESMA should consider. Comments should reach us by Wednesday 15 October 2014. All contributions should be submitted online at www.esma.europa.eu under the heading ‘Your input/Consultations’.Publication of responses All contributions received will be published following the end of the consultation period, unless otherwise requested. Please clearly and prominently indicate in your submission any part you do not wish to be publically disclosed. A standard confidentiality statement in an email message will not be treated as a request for non-disclosure. Note also that a confidential response may be requested from us in accordance with ESMA’s rules on access to documents. We may consult you if we receive such a request. Any decision we make is reviewable by ESMA’s Board of Appeal and the European Ombudsman.Data protection Information on data protection can be found at www.esma.europa.eu under the heading ‘Disclaimer’.Who should read this paper?This paper may be specifically of interest to any investor that deals in financial instruments and emission allowances subject to the Market Abuse Regulation, issuers of instruments in the scope of the Regulation, financial intermediaries, operators of trading venues and participants in the emission allowance market.
31/07/2014 2014/944 Potential Risks Associated with Investing in Contingent Convertible Instruments , Statement PDF
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The European Securities and Markets Authority (ESMA) is issuing this statement to clarify to institutional investors risks from a newly emerging asset class referred to by most market participants as contingent convertibles instruments (CoCos). If they work as intended in a crisis CoCos will play an important role to inhibit risk transfer from debt holders to taxpayers. They along with standards to improve the quality and quantity of bank capital reflect a considerate response to the former regulatory capital framework. However, it is unclear as to whether investors fully consider the risks of CoCos and correctly factor those risks into their valuation. ESMA believes there are specific risks to CoCos and that investors should take those risks into consideration prior to investing in these instruments.
21/08/2014 2014/808 response form Response form to the CP on technical advice under the Market Abuse Regulation (MAR) Reference DOCX
792.65 KB

Please use this form to respond to the Consultation Paper.

03/09/2014 2014/884 Report on Trends Risks Vulnerabilities No. 2, 2014 Final Report PDF
2.5 MB
03/09/2014 2014/883 ESMA Risk Dashboard No. 3, 2014 Final Report PDF
763.54 KB