14 March 2011

WSJ: ESMA weitgehend "unabhängig"

The role of the new European Securities and Markets Authority isn't to find consensus between Member States, but to act as a powerful independent agency, said its recently appointed chairman in an interview on Wednesday.

Mr Maijoor said his priorities will be oversight of the credit-rating agencies, focusing on consumer protection, establishing a single rule book for financial markets, working with the EU's two other new oversight authorities, the European Banking Authority and the European Insurance and Occupational Pensions Authority, as well as using its powers to ensure EU law.

In very specific cases, he expects to use the ESMA's authority of banning certain products, but said this would be the exception and not the rule. An example of a clearcut case would be if a large portion of an investment goes towards a product's administrative fees.

"We need to have an eye, and it needs to improve, on serving the interest of the financial consumer and retail investor," said Mr. Maijoor. "Supervision is there because it will result in better functioning financial markets." "For instance", he said, "the ESMA should have the option to stop short selling "in emergency situations."

ESMA will also tackle derivatives legislation and is likely to be charged with researching and recommending an EU position on which derivatives will be required to go through a clearing house.

The ESMA will also have a role in the EU's Markets in Financial Instruments Directive, now under revision. The directive sought to create more competition among market exchanges, but it also had the effect of reducing transparency. Many of these new exchanges are off-platform and dark pools where trades are conducted privately among banks rather through an institutional exchange.

"It needs to be improved in terms of post-trade transparency. That is one of the proposals that I think indeed is a good way to improve on this transparency issue," said Mr Maijoor. In pre-trade transparency, he said investors should have access to the best execution, which is complicated by having multiple trading venues.

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