On 10 October 2022, the European Securities and Markets Authority (ESMA) has officially announced and published its strategic priorities for the next 5 years (2023-2028). The Strategy takes into account the key priorities of the European Union (EU) in the area of financial services and aims to address the most significant risks linked to EU financial markets.
ESMA ensures that the retail clients’ protection and the stability of the financial markets remain always its top priorities. Therefore, in order to further focus on these priorities, ESMA has set up the following strategic goals for the next 5 years:
- Fostering effective markets and financial stability.
- Strengthening supervision of EU financial markets.
- Enhancing protection of retail investors.
- Enabling sustainable finance.
- Facilitating technological innovation and effective use of data.
One of the most important goals for ESMA is the enhancing protection of retail investors. Based on that, ESMA and the NCAs will ensure that investors are effectively protected, with a particular focus on the protection of retail investors. ESMA will further develop retail investor trend monitoring and analysis. It will concentrate its efforts on risks posed among others by new and innovative products or services (e.g., crypto assets or non-fungible tokens) and products with strong retail investor demand (e.g., ESG). ESMA will also assess risks to retail investors that may stem from distribution of complex products, alternative marketing and distribution channels, such as e.g., social media advertising.
ESMA will reinforce its convergence work, particularly with regards to the supervision of cross-border activities, aiming to prevent significant consumer detriment by fostering a common supervisory culture and consistent supervisory outcomes for investors. ESMA will fully use its convergence toolkit in this area, including product intervention, where appropriate. New initiatives on ensuring effective supervision of cross border services will aim to facilitate:
- effective information exchange between the home and host authorities;
- joint supervisory measures to support effective supervision and enforcement such as joint supervisory work, supervisory colleges or the use of delegation.
ESMA will also enhance supervision and convergence through common supervisory exercises for example CSAs and mystery shopping, to be performed by all or a significant number of NCAs.
ESMA ensures that it will further strengthen its role as data and information hub in the EU and contribute to extending the effective use of data in financial market supervision.
For further information about the Strategy, you can read the ESMA Strategy here.