With less than a month left before the UK is reportedly leaving the EU, the boss at the EU’s financial regulator had a few choice words to say.
Steven Maijoor, chair of the European Securities and Markets Authority (ESMA), spoke at AFME’s Legal and Compliance Conference in Paris on Friday October 4.
While most of his speech was devoted to how ESMA has worked to strengthen the EU’s regulatory and supervisory framework, he added that “no speech would be complete these days without addressing Brexit.”
Maijoor added, “On almost a daily basis, people are glued to the twists and turns of what is happening in the UK like a well-written TV soap. However, the real knock-on effect of this turbulence is that the associated risks continue to change.”
Despite admitting that he did not want to “dwell on well-trodden ground”, Maijoor said “it would be unwise of me not to reiterate ESMA’s key standpoint.”
He continued to say that preparations for a potential no-deal Brexit is still ongoing and warned market participants, investors and consumers to ensure they had contingency plans in place and to avoid relying too much on “public solution to mitigate potential cliff-edge effects, should they materialize.”
The ESMA chair reminded the listeners that the regulator issued guidelines in 2017 for what is expected of operators operating in the EU’s 27 member states.
“In the area of the clearing and settlement, which was an area generally considered to entail
the highest stability risks in the event of a no-deal, ESMA has taken contingency actions as
private sector actions could not sufficiently address these risks,” Maijoor said. “Based on a temporary equivalence decision by the Commission on the UK’s regulatory framework for CCPs and
central securities depositories (CSDs), ESMA has taken conditional decisions on the recognition of three UK CCPs and one UK CSD so that they may continue to offer their services in the EU in the case of a no-deal Brexit.”
He added that ESMA will publish more technical statements in the upcoming weeks to recap the full list of measures previously put in place by ESMA and some that could require updates.
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