The European Securities and Markets Authority (ESMA) has published its 2020 Work Programme, setting out its priorities and areas of focus for the next 12 months in support of its mission to enhance investor protection and promote stable and orderly financial markets.

ESMA will continue monitoring financial activities and retail investor trends, with a particular focus on financial innovation. The ESMA monitoring framework is designed to ensure that financial innovation does not undermine the core objectives of investor protection, financial stability and orderly markets. To prioritise which financial innovations require deeper analysis and potential responses, e.g. to possible market failure, ESMA has developed the financial innovation scoreboard: a methodology based on quantitative and qualitative assessment. Key analytical areas are FinTech, crypto-assets, tokenisation, crowdfunding, artificial intelligence, machine learning, ESG indicators and technology risk, including outsourcing to cloud providers and cyber resilience.

The Financial Innovation and Product Risk Analysis supports ESMA’s supervisory convergence activities on innovation issues and are aimed to build a common approach and exchange of expertise at EU level in the area of financial innovation concentrating on ICOs, crypto-assets, innovative FinTech business models, innovations hubs and regulatory sandboxes. Building on its monitoring of financial innovation in the EU, ESMA contributes to the co-ordination of innovation facilitators (European Forum of Innovation Facilitators), in cooperation with the Commission and the other ESAs.

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