ESMA plans to have MOUs in place with the UK before the end of March 2019 so that delegation to the UK may continue.

The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, delivered a keynote speech at the World Federation of Exchanges General Assembly and Annual Meeting in Athens on 3 October. 

Mr Maijoor's final comment was of particular interest to those of us in the asset management and investment funds community who are preparing for various Brexit scenarios, including a possible no-deal Brexit.

Mr Maijoor confirmed that ESMA plans to start negotiations with the UK FCA so as to have the necessary cooperation agreements (Memoranda of Understanding or MoUs) in place sufficiently on time before the end of March 2019 to permit delegation to continue to the UK. 

In the case of a no deal Brexit, where the UK becomes a third party, national regulators (NCAs) and ESMA need to have MoUs in place with the UK FCA. These MoU are in place already with a large number of third country regulators (ESMA issued an updated list of AIFMD MoUs signed by EU NCAs with third country regulators on 17 September 2018). These MOUs are essential to meet regulatory objectives and allow information exchange for effective supervision and enforcement, for example for market abuse cases. ESMA has coordinated the preparations for such MOUs together with the EU27 NCAs.

Mr Maijoor noted that this is not only relevant for trading and central clearing, but generally for supervision and enforcement in securities markets.

Mr Maijoor also supports a swift adoption of EMIR 2.2, complemented by a transitional provision allowing for the continued access to UK-based Central Counterparties (CCPs), subject to conditions ensuring that UK CCPs continue to comply with EMIR requirements.. 

As noted in our September asset management and investment funds ezine, the EU is moving towards a centralised equivalence regime to deal with regulatory and supervisory relationships between EU and third countries.

For more information please contact a member of the Asset Management & Investment Funds Team.

Date published: 4 October 2018