ESMA: Update On Governance And Reporting Obligations Following The UK’s Withdrawal From The European Union

The European Securities and Markets Authority (ESMA) is publishing this statement to clarify issues relating to its governance and the reporting obligations for UK entities from 1 February 2020 following the United Kingdom’s (UK) withdrawal from the European Union (EU). The terms of the Withdrawal Agreement (WA) stipulate that UK representatives will no longer be permitted to participate in the EU institutions, agencies, or other bodies, and their governance structures, except where exceptionally justified, under the conditions set out in Article 128(5) of the WA. Therefore, from 1 February: the UK Financial Conduct Authority (FCA) will no longer be a member of ESMA’s Board of Supervisors or participate in any of ESMA’s other governance bodies.
By virtue of the WA, EU law will continue to apply to the UK, as if it were a Member State, during the transition period from 1 February 2020 to 31 December 2020. This means for instance that: rights and obligations for UK entities under EU law will also continue to apply – such as reporting and notification obligations under MiFIDII/MiFIR, EMIR, CSDR, AIFMD, MMFR; and ESMA will continue to directly supervise registered Credit Rating Agencies, Trade Repositories and Securitisation Repositories established in the UK during this period. Next steps In the coming eleven months, ESMA will continue monitoring the application of EU law to/in the UK and will closely monitor developments in preparation for the end of the transition period. ESMA will also engage and provide input as necessary with/to the European Commission.
Background
ESMA’s mission is to enhance investor protection and promote stable and orderly financial markets. It achieves these objectives through four activities: assessing risks to investors, markets and financial stability; completing a single rulebook for EU financial markets; promoting supervisory convergence; and directly supervising specific financial entities. ESMA achieves its mission within the European System of Financial Supervision (ESFS) through active cooperation with the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Systemic Risk Board, and with national authorities with competencies in securities markets (NCAs).