ESMA seeks ‘urgent’ new EMIR enforcement powers

Steven Maijoor urges Commission to grant further sanctioning powers to ESMA and looks to increase fines by five times.

The European Securities Market Authority (ESMA) is urgently seeking a review of EMIR trade reporting requirements, which could see the regulator gain further sanctioning powers to increase fines by up to five times.

Chair at ESMA, Steven Maijoor, made the comments in a letter to the European Commission’s director general of financial stability, Oliver Guersent.

Maijoor listed several aspects as being “essential to ensure ESMA is seen as a credible supervisor and is able to perform its supervisory responsibilities under EMIR." 

Those aspects included strengthening ESMA‘s sanctioning powers and the level of trade repositories fines and further additional reporting requirements related to data quality.

ESMA is looking to increase the upper limit of fines imposed to five times the current level, “to ensure that they have sufficient dissuasive effect.”

The letter to the European Commission concluded that the suggested amendments to EMIR are considered “as a matter of urgency”.

It also outlined suggested improvements to the EMIR reporting framework, including amendments to clearing obligations and a review of categories of large and small counterparties.

ESMA wants to improve transparency and predictability of margin requirements and reconsider third country CCP recognition framework to ensure a timely and risk based process with safeguards in place. 

Earlier this month, Maijoor called for the EU to rethink its model in granting foreign clearing houses equivalency.

He outlined the flaws that currently exist within the EU’s equivalency approach and concerns over the risks third country CCPs pose in the EU that are adequately supervised by its home regulator to delegates at a European conference.

“ESMA has very limited opportunities to see the specific risks that third country CCPs might be creating in the EU as we have very limited powers regarding information collection and risk assessment,” Maijoor said.