ESMA publishes 2018 Work Programme for CRAs, trade repositories and third country CCPs

On 8 February 2018, the European Securities and Markets Authority (ESMA) published its 2017 Annual Report and 2018 Work Programme setting out its main supervisory activities for credit rating agencies (CRAs), trade repositories (TRs), and third country central counterparties (TC-CCPs) in the EU. ESMA supervises eight registered TRs, 26 registered CRAs and four certified CRAs from third-countries. The report also details ESMA’s supervisory activities and achievements in 2017.   

2018 Supervisory Priorities

For CRAs and TRs in the EU, the key supervisory themes identified for 2018 are based on ESMA’s risk-based approach. In 2018, ESMA will prioritise its supervision on the quality of the credit rating process, including CRAs’ validation practices and the quality of data reported by TRs. ESMA will also continue to focus on information technology and internal control, in addition to governance structures and management quality. Common themes in the supervision of both TRs and CRAs on which ESMA will perform further work include Brexit, fees charged by CRAs and TRs, cloud computing and preparing guidelines for periodic information. The work on Brexit will be key for ESMA in 2018. By the end of the year all supervised entities should be ready if the UK leaves the EU under a cliff-edge scenario.

The report details the priority areas for supervision that ESMA has identified for TC-CCPs in 2018. These include assessment of 15 pending applications for recognition as TC-CCPs and monitoring the potential risks TC-CCPs might import into the EU. In addition, ESMA will monitor the impacts of Brexit on the third country CCP regime.