04 November 2013

FN: Maijoor steers ESMA through a regulatory storm

Few could accuse ESMA of wasting time in setting about the sprawling task of helping to shore up Europe's financial regulatory system since its creation nearly three years ago - and it has 118 tasks on its to-do list for next year.

ESMA is overseeing the approval process for trade repositories, and with no fewer than 118 tasks on its to-do list for next year, the workload for the regulator and Steven Maijoor shows no signs of easing up. Maijoor said: “We basically had to open the shop while it was still being built and stocked. Normally you do the preparatory work and prepare for difficult times when you need to deliver, we now had to do it in parallel, and considering we had to do it in parallel I think we have done quite well.”

The 49-year-old former Dutch regulator is halfway through his five-year tenure as ESMA’s inaugural chairman, and boasting a strong record of contributing to the growth of nascent institutions, he appears well suited to the role. He joined from the Netherlands Authority for the Financial Markets, where he had been a managing director since the organisation’s early days and played an instrumental role in overseeing the implementation of new financial auditing and reporting rules.

In line with its mandate to help national financial regulators apply European law consistently, ESMA has the colossal task of translating a barrage of new European Union financial legislation into applicable regulations. It recently delivered technical standards on new EU rules on derivatives trading under EMIR and will supervise their consistent implementation across Member States. The agency is overseeing the registration of information warehouses known as trade repositories, which will collect data on derivatives trades and increase transparency on a firm’s trading exposures. The watchdog has also tackled the controversial topic of financial sector pay, launching a crackdown in June on remuneration standards for asset managers.

Besides the slew of new regulations, ESMA and Maijoor have also been flexing their supervisory muscles. The watchdog has been overseeing credit rating agencies, and last November was handed power by the EU to ban firms from short-selling certain financial instruments in exceptional circumstances. It is in this area that Maijoor has had to deal with some setbacks. ESMA’s far-reaching supervisory ambitions have drawn criticism from some industry bodies and Member States, which fear the European Commission might be handing it too much power.

The financial crisis has been a central theme in Maijoor’s career as a regulator, from watching it unravel in his time at the AFM, to helping create more stable markets as the eurozone economies were grappling with the sovereign debt crisis. He said: “Financial markets can only function properly with the right regulation and supervision. This is not to argue for ever-more regulation and supervision because that shouldn’t be the solution, but at the same time we can also see that we were wrong before the crisis and that measures needed to be taken to make markets safer.”

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