EU regulator plans wider supervisory role over crypto, clearing and tech providers

The European Securities and Markets Authority (ESMA) recently published its 2027 Work Programme, setting out plans to expand financial market supervision, simplify regulation and make greater use of data and artificial intelligence. The EU financial markets regulator and supervisor said the programme marked a shift from preparing major initiatives to delivering them, as it continues to implement its multi-annual strategy for 2023-2028. ESMA chair Verena Ross said 2027 would represent an important stage in the development of the Savings and Investments Union (SIU), with several of the authority’s strategic initiatives moving into their delivery phase. “2027 marks an important milestone for the Savings and Investments Union as many of ESMA’s strategic initiatives move into the delivery phase,” Ross said. “While co-legislators continue their work on the Market Integration and Supervision Package, ESMA is already advancing on key elements of the SIU agenda including initiatives to simplify the regulatory, reporting and supervisory framework.” She said ESMA was also modernising its approach to market supervision through greater use of data and technology. “This work programme reflects ESMA’s commitment to strengthening the Single Market, protecting investors and safeguarding financial stability,” Ross said. “It enables ESMA to remain agile in the face of volatile and risky market conditions, while responding effectively to rapidly changing needs and priorities.” “As financial markets continue to evolve, I know that ESMA and its staff will remain focused on ensuring that EU capital markets are efficient, resilient and attractive,” she added. Wider supervisory responsibilities ESMA will expand its supervisory work in several areas during 2027, including consolidated tape providers and external reviewers of European Green Bonds. It will also process applications from, and begin supervising, ESG rating providers. The authority will adapt to its expanded responsibilities for benchmark administrators as part of the broader increase in its supervisory remit. ESMA will also carry out oversight activities covering critical ICT third-party service providers, working alongside the other European Supervisory Authorities. It will continue monitoring and promoting compliance with the Digital Operational Resilience Act across its supervisory mandates. The authority will review the impact of recent reforms under EMIR 3, which were introduced to strengthen the resilience of EU clearing markets. The work will examine whether EU clearing houses remain robust while helping reduce the bloc’s dependence on certain systemically important clearing services located outside the EU. Alongside its direct supervisory responsibilities, ESMA said it would continue efforts to bring supervisory practices closer together across member states. This will include continued cooperation with National Competent Authorities, including in the supervision of crypto-asset service providers under the Markets in Crypto-Assets Regulation. Focus on simpler financial markets ESMA will also prepare for changes to its responsibilities following the expected final agreement between EU co-legislators on the Market Integration and Supervision Package in 2027. At the same time, it will pursue other priorities linked to the Savings and Investments Union. These will include implementation of the European Single Access Point and the transition to T+1 settlement, which will shorten the standard settlement cycle for relevant securities transactions. Investor protection will remain another priority, with ESMA supporting implementation of the Retail Investment Strategy and promoting clearer and more accessible information for investors. The authority’s four flagship simplification initiatives covering transaction reporting, funds reporting, the retail investor journey and risk-based supervision will also enter a new phase in 2027. ESMA said the initiatives were intended to reduce unnecessary administrative burdens, improve the usability of regulatory data and make supervision more effective. A separate report published alongside the work programme sets out measures undertaken during 2026 and planned for 2027 to embed simplification and burden reduction across ESMA’s regulatory and supervisory activities. ESMA will also support implementation of key EU financial legislation by developing technical standards and providing advice across its areas of responsibility. More data and artificial intelligence Technology will form another major part of ESMA’s work during 2027, with the authority planning to strengthen its data capabilities and increase the use of innovation in financial supervision. It will continue developing its Data Platform and deploy artificial intelligence-based tools to support supervisory work. ESMA will also strengthen its cybersecurity capabilities as financial markets become increasingly dependent on digital systems and data. Crypto-assets will remain an area of focus, alongside work examining the impact of artificial intelligence on financial markets. Tokenisation will also remain a priority, with ESMA continuing to examine the opportunities it could create for EU capital markets. The 2027 programme therefore combines an expansion of ESMA’s direct supervisory responsibilities with efforts to simplify existing regulatory requirements and make greater use of technology. The authority said the programme was designed to support more efficient and resilient EU financial markets while maintaining investor protection and financial stability as its central objectives.