Thank you for inviting me to speak before you today. I am pleased to have the opportunity to
give you a brief outline of ESMA’s key activities over the past 12 months and share some
challenges with you.
Before doing so, let me start by saying that my mission as ESMA Interim Chair began on 1
April 2021 following the end of Steven Maijoor’s mandate as ESMA Chair. It seems like the
transition period is finally reaching its last stage and I particularly would like to thank the
Members of the European Parliament for their swift co-operation. I sincerely hope that Verena
Ross can start shortly as ESMA Chair and provide strategic steer so that ESMA can continue
to fulfil its mission.
Allow me to say two things on the ESMA Chair appointment process. Firstly, my term as Interim
Chair would not have been possible without ESMA staff, who always remained committed and
professional. I would like to thank them for their invaluable support. Secondly, since the ESA
review, the appointment of the ESMA Chair lies with the Council and the European Parliament.
If we collectively want to be able to attract good candidates for the European Supervisory
Authorities (ESAs) also in the future, including from the private sector, the process will need to
be streamlined. Firstly, governance. Indeed, there have been important changes to the governance
framework, starting with the set-up of the CCP Supervisory Committee under the leadership
of Klaus Löber as Chair and Nicoletta Giusto and Froukelien Wendt as Independent Members.
The CCP Supervisory Committee is an important addition and strengthens ESMA’s role in
enhancing the safety and efficiency of central clearing parties (CCPs) both in the EU and in
third countries.
I am also pleased that following the end of Verena Ross’ second mandate as ESMA Executive
Director (ED), ESMA’s Board of Supervisors appointed Natasha Cazenave as ED from the 1st
of June 2021. With the upcoming completion of the ESMA Chair appointment process, ESMA
will have a very strong senior management team. Together they will develop ESMA further
also as supervisor, including from next year the supervision of data reporting service providers
and benchmark administrators for which we have been actively preparing.
Secondly, and let me now move closer to ESMA’s mission, investor protection. Financial
technology is rapidly impacting markets. Most young people have never heard of an investment
advisor and are buying products on their smartphone. Digitalisation can bring new investment
opportunities more accessible and lower costs by fostering competition.
Yet, it is not exempt of challenges. We have seen a surge in cross-border retail trading during
the pandemic. Using sometimes gamified features, innovative online and mobile trading
platforms have managed to offer easy-to-use investment services. While the zero-commission
business models may attract consumers, they also prompt investor protection concerns, as
firms often receive “payment for order flow” compensating for the lack of direct client
commissions.
Consequently, events like the GameStop episode urged ESMA to publish a warning on the
use of social media and a statement on “payment for order flow”. Furthermore, given the
market developments and the significant increase in market activity with regards to Special
Purpose Acquisition Companies (SPACs), ESMA issued a public statement, highlighting the
complexity of the transactions, illustrated for example by the risks related to dilution which can
have an impact on investor return.
The rapidly changing landscape and current economic situation emphasize the importance to
promote financial literacy of investors. While financial education is critical to ensure investors
are capable of making informed decisions, this objective goes beyond the ESAs’ remit and
touches upon investment cultures and national educational systems....more at ESMA