The European Securities and Markets Authority (ESMA), in coordination with the National Competent Authorities (NCA), is closely monitoring the impact of the Ukraine crisis on the financial markets and is prepared to use its relevant tools to ensure the orderly functioning of markets, financial stability and investor protection. This is part of the general response of the European Union to the tragic consequences of Russia’s military aggression.
ESMA provides a forum for supervisors to discuss questions and coordinate responses arising from the current situation. To ensure that stakeholders are adequately informed, ESMA describes below its specific supervision and coordination activity, as well as recommendations for financial market participants:
Supervision and coordination activities
- CCP – ESMA is closely monitoring CCP-related volatility and margin developments in the energy and raw materials market segments. It is also in close contact with NCAs focusing on the impact on clearing members and their clients in those markets;
- credit rating agencies – ESMA continues to actively collaborate with CRAs to ensure sufficient transparency around ratings and is monitoring the impact of sanctions on CRA operations in close collaboration with other regulators;
- Points of reference – ESMA collaborates with its supervised benchmark administrators to verify the impact of market developments and sanctions on the benchmarks provided. It is also engaging and coordinating with NCAs regarding the impact on benchmarks provided by administrators under the NCAs’ oversight mandate;
- Investment Management – ESMA has reinforced its coordination role by monitoring investment funds, organizing frequent exchanges with NCAs to analyze market developments and supervisory risks linked to the crisis, focusing on liquidity issues and the use of liquidity management tools (LMT) and monitoring of issues related to asset valuation and possible suspension of redemptions;
- secondary markets – ESMA and the NCAs are monitoring the market situation, and ESMA is assisting the NCAs with the consistent implementation of sanctions by market operators, including the suspension of instrument trading by venues;
- Central Securities Depositories – ESMA is monitoring, in coordination with the NCAs, the impact of the sanctions on the operations of the CSDs and helping with their implementation in a consistent manner. It is also consolidating data on fault clearance levels as one of the indicators to monitor market developments;
- cyber security – ESMA is facilitating the collection and exchange of information and experiences between NCAs regarding cyber incidents; Y
- Risks evaluation – ESMA continuously monitors risks to market participants and financial stability and exchanges its risk assessment regularly with policy makers and authorities at national, EU and international level.
- Sanctions Compliance – Financial market participants must ensure that they comply with the relevant EU sanctions and monitor any additional restrictions. The European Commission (EC) will provide clarity and answer queries on the scope and implementation of these and ESMA is supporting the EC in collecting such queries;
- Market Disclosure – issuers must promptly disclose any inside information about the impacts of the crisis on their fundamentals, prospects and financial condition in accordance with their transparency obligations under the Market Abuse Regulation, unless the conditions for a disclosure are met. late disclosure; Y
- Financial reports – issuers should provide transparency, to the extent possible on both a qualitative and quantitative basis, about the actual and foreseeable direct and indirect impacts of the crisis on their business activities, exposures to affected markets, supply chains, financial condition and economic performance in its 2021 year-end financial report if not already finalized and at the annual meeting of shareholders or in its interim financial information disclosures.
Team Leader – Communications
Telephone: +33 (0)1 58 36 43 24
Telephone: +33 (0)1 58 36 64 23