ESMA sets plans and budgets for crypto and FinTech monitoring in 2019

In its 2019 Annual Work Programme, the European Securities and Markets Authority has listed its key priorities for the year and set out budget and staff numbers across its areas of focus

What has happened?

The European Securities and Markets Authority (ESMA) has earmarked just over €1 million to monitor cryptoassets and FinTechs in 2019.

What does this mean?

In its 2019 Annual Work Programme, the financial regulator has listed its key priorities for the year and set out budget and staff numbers across its areas of focus.

In the document, ESMA explained that it monitors financial activities and retail investor trends, with a particular focus on financial innovation, including Fintech and cryptoassets.

As part of this remit, ESMA also identifies issues and/or risks connected to those activities and trends and co-ordinates national competent authorities' initiatives on market monitoring and promoting best practices, including "providing advice or making proposals of relevant actions where needed".

The agency added that the monitoring also helps it to play a proactive role in market intelligence gathering and to develop metrics that will determine when and where it will use its own product intervention powers.

One of ESMA's key objectives for the coming year will be to:

"Achieve a co-ordinated approach to the regulation and supervisory treatment of new or innovative financial activities and provide advice to present to the EU institutions, market participants or consumers."

It also plans to implement the framework for the use of the product intervention powers provided by the Markets in Financial Instruments Directive (MiFIR).

This relates to measures on the provision of contracts for differences (CFDs) and binary options to retail investors.

The measures were adopted in June and came into effect in July for binary options and August for CFDs.

They include a a prohibition on the marketing, distribution or sale of binary options and a restriction on the marketing, distribution or sale of CFDs, to reail investors.

ESMA has budget €1,107,360 and planned for six full-time members of staff for the "monitoring of retail investor trends, financial activities and innovation, including Fintech" and for "market intelligence gathering" in 2019.

Other key areas of focus

Other areas the regulator will focus on include supporting national competent authorities with regard to MiFID II and MiFIR and using data gathered under the two legislations "to support its own work on stable and orderly markets".

ESMA will also help with the implementation of the FinTech Action Plan.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Michael Thomas
James Roslington
Senior Associate


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