Verena Ross spoke to the City of London Brussels Annual Reception on the changes to the EU supervisory structure and the powers of the European Supervisory Authorities. She then looked at ESMA's current challenges, which she summarised as:

  • creating the single rulebook: ESMA expects to work on around 40 separate technical standards in 2012;
  • dealing with regulatory arbitrage: ESMA needs to ensure that harmonised implementation goes beyond new rules and expects to issue more guidance and recommendations in future;
  • investor protection: ESMA has set up a new committee to identify risks to investors, keeping in mind its ultimate power to ban products or activities. It expects to consult on guidelines for Exchange Traded Funds and Structured UCITS by the end of 2011;
  • credit rating agency (CRA) supervision: ESMA is the only EU authority to have direct and day-to-day supervisory responsibility for cross-European financial entities. It has started with CRAs and expects to move on to take the role of registration and supervision of Trade Repositories under the Regulation on OTC Derivatives, Central Counterparties and Trade Repositories (EMIR); and
  • financial stability: ESMA will continue to consider financial stability issues in all its workstreams.

(Source: ESMA Speaks on Regulation)