ESMA was founded back in the year 2011 in Paris with the objective to develop a uniform rulebook for the European Union [E.U.] financial markets, along with providing additional market supervision. The authority has established Tech. Committees in numerous industrial fields along within in IT field, and additionally works within the field of securities legislation and regulation.
For its 2019 Annual Work Program, the ESMA expects a 1.1 Mln Euro program with its new objectives that embrace regulation and supervisory treatment of arising financial activities, specializing in fintech and crypto assets.
Within the proclaimed framework, the ESMA would also determine risks associated with such activities and trends, and supply relevant recommendation and proposals whichever required. Moreover, the ESMA has set a goal to supply guidance and facilitate the implementation of the Markets and financial Instruments Directive [MiFID] so as to make markets more clear.
The program is expected to:
“Achieve a coordinated approach to the regulation and superordinate treatment of new or innovative monetary activities and provide recommendation to present to the E.U. institutions, market participants or investors.”
Earlier in this month, the ESMA revealed its plans to increase restrictions on contracts for differences [CFD’s], along with crypto-based ones. The agency explained its move with significant investor protection concern related to the offering of CFD’s to the retail investors.
Even in March, the ESMA build its requirements for CFDs. “Due to the precise characteristics of cryptocurrencies as an asset class the market for financial instruments providing exposure to cryptocurrencies, like CFDs, will be closely analysed, and ESMA would assess whether or not stricter measures are needed,” the regulator explained.
In Sept., Belgian think tank Bruegel referred to E.U. ministers for unified legislation on cryptocurrencies along with more scrutiny on how they’re distributed to investors. The move reportedly comes so as to manage associated risks while realizing the potential of blockchain technology.