ESMA identifies measures to further enhance depositary supervision

Overall, the peer review found that the foundational frameworks for the supervision of depositaries are in place. However, it also found notable divergences across jurisdictions in terms of the depth and maturity of supervisory approaches. While some NCAs demonstrated highly developed and granular practices, others displayed areas for improvement.

 In addition, there were several transversal findings, including:

• The need for supervisory engagement to be more frequent and proportionate to the associated risk, given the concentration of depositaries within the markets of the assessed NCAs and their potential systemic significance.
• Concerns regarding the depth and intrusiveness of the supervisory assessments of several NCAs with respect to depositaries entrusting third parties with significant tasks, bearing in mind the obligation of depositaries to perform control-related activities autonomously. 

The peer review focused on five jurisdictions: Czechia (CNB), Ireland (CBoI), Italy (Bank of Italy), Luxembourg (CSSF), Sweden (SFSA) and examined the supervisory and enforcement practices of these National Competent Authorities (NCAs) across key areas of depositary business activities. 

Next steps

The objective of peer reviews is to promote consistent and effective supervisory practices across the EU and high-quality supervisory outcomes, as well as to foster a level playing field among NCAs. In that context, the report intends to aid all NCAs in their supervision of depositaries, and it is particularly relevant considering the ongoing discussion on the importance of the investment management sector to European capital markets.

ESMA will continue promoting further discussion on the supervision of depositaries and will follow up on the recommendations in the report in due course.

Further information:

Cristina Bonillo

Senior Communications Officer
press@esma.europa.eu