The European Securities and Markets Authority (“ESMA”) has published its first Supervisory Convergence Work Programme 2016 (the “Programme”), detailing the activities and tasks it will carry out to promote sound, efficient and consistent supervision across the EU. The Programme also sets out to provide comparable regulatory outcomes.ESMA are keen to note that although the Programme will have a set of key priority areas, implementation of these priorities will be monitored in the course of 2016 and may be adjusted according to developments.

Programme parameters

Whereas the focus for ESMA previously was the single rulebook work in relation to new legislation, the focus throughout the next four years will shift to the Programme. The Programme aims to follow these parameters in order to achieve its priorities:

  • Increase the focus on supervisory convergence relative to single rulebook.
  • Place greater focus on up-front assistance to NCAs.
  • Use a wider range of tools for supervisory convergence.
  • Introduce clearer criteria for prioritisation.
  • Enhance internal governance.

Factors ESMA have considered for the Programme 

  • The regulatory environment – new recent legislative regimes are still being bedded in and, in the coming years, there are further packages of legislation due to be rolled out. New legislation can create challenges for firms such as, what are the precise standards that firms are to be accountable for? ESMA see 2016 as a transitional year in relation to the significant legislative changes and the Programme sets out to create preparatory tools to deal with these changes.
  • The market environment – factors such as the challenging economic environment in Europe and Asia, low interest rates, innovative market practices in collateral management and disruptive innovation in the technology sector have influenced ESMA’s choice of priority areas for the Programme.

Core package of priority areas for the Programme

ESMA have created a core package of priority areas that the Programme aims to address. The core package aims to strike a balance between ensuring that the most important issues will be dealt with, but with flexibility to respond to any unforeseen issues that may occur in the future. The priority areas are as follows:

  • Preparing for the sound, efficient and consistent implementation and supervision of MiFID II/MiFIR. ESMA believe that intensive work will be required in 2016 to ensure that NCAs and market participants have the necessary clarification in good time. This area will need to cover key investor protection issues such as product governance, and information on risks, costs and charges.
  • Finalising the IT infrastructure needed to support the effective implementation and supervision of MiFID II, MiFIR and MAR.
  • Facilitating the sound and consistent supervision of OTC derivatives markets and in particular EU CCPs.
  • Supporting the effective application of the Capital Markets Union. To compliment this, there will be a thematic study of home and host responsibilities under UCITS and AIFMD to clarify NCA responsibilities.

In addition, to the above priority areas, ESMA will also prioritise resources to promote ex-ante discussions of specific ‘live’ cases in relation to eg. corporate funding, market integrity, AIFMD and crowdfunding and they will also be potentially facilitating mediation between NCAs if and when problems arise.


This ambitious Programme reflects a shift towards more activities in the field of supervisory convergence, which ESMA believes is important in supporting the building of a Capital Markets Union. ESMA are aware that some topics, ie. sanctions have had to be excluded from the 2016 Programme, due others taking priority, but intends excluded topics to be the focus of the next Programme scheduled for 2017.

To view the full ESMA Programme documentation, which contains more in-depth detail on the core priorities, please click here.

Should you require any further advice or information on the above, Cleveland & Co, your external in-house counsel, are here to help.