ESMA Strategic Priorities for 2025

ESMA Strategic Priorities for 2025

Year 3 of the 2023-2028 work plan will see ESMA continue its focus on delivering legislative projects initiated in previous years (e.g. MiCAR, DORA, Greenwashing).

Here are the five key priorities:

Priority 1 – Green Bond Regulation and delivery of final report on greenwashing

• ESMA released its final report on greenwashing and reiterated ESMA’s commitment to better monitor and detect greenwashing and to critically scrutinise sustainability-related claims. ESMA plans to achieve this through deployment of SupTech (Supervisory technology) tools such as Machine Learning, Data Analytics and AI, capacity building and use of Common Supervisory Actions.
• In 2024, ESMA conducted the “Fit-For-55” climate stress test, focusing on financial institutions such as banks and investment funds. The test confirmed that these institutions are resilient enough to withstand climate and macro-financial shocks.
• In 2025, ESMA plans to utilise NLP (natural language processing) to detect potential greenwashing activities and use greenwashing indicators to support NCA (National Competent Authority) supervision activities.

Priority 2 – Technical standards and guidelines will be delivered in relation to Markets in Crypto Asset Regulation (MiCAR)

• In 2024, ESMA published a consultation paper on MiCAR, which included procedures for detecting and reporting abuse in the crypto-assets market as well as the rights of clients in relation to transfer services for crypto-assets. This consultation closed for comments in June 2024 and and the draft technical standards have been submitted to the European Commission for adoption.
• ESMA will continue to develop technical standards and guidelines on MiCAR to ensure improved investor protection and functioning of the crypto-asset markets. The main attention points of MiCAR implementation are to find solutions to risks of potential market abuse and to prevent the risk of regulatory arbitrage by Crypto-Asset Service Providers (CASPs).
• In 2025, ESMA and the EBA will publish a report on application of MiCAR and on the latest developments in crypto assets.

 Priority 3 – Further Digital Operational Resilience Act (DORA) work

• In 2024, ESMA published a report on the policy mandates on DORA which included technical standards on timelines for reporting cyber threats the steps for conduct of oversight activities. The report also included guidelines on estimation of costs caused by information and communication (ICT) related incidents and guidance on oversight cooperation between the ESAs.
• In 2025, with the implementation of DORA, there will be a shift from the single rule book activity to supervision and oversight. ESMA will also commence to ensure compliance with DORA requirements by credit rating agencies, data reporting services providers and trade repositories, among others.
• ESMA will also start to collect fees from Critical Third-Party Providers (CTPPs) under DORA for their oversight.

Priority 4 – Consolidated Tape Providers (CTPs) under Markets in Financial Instruments Directive (MiFID) & Markets in Financial Instruments Regulation (MiFIR)

• In 2024, ESMA published a consultation which included new rules for authorisation of CTPs, guidelines on data quality requirements for all CTPs and reflections on the assessment of CTP applicants.
• ESMA also launched a consultation on amendments to standards for reporting of transactions and for maintenance of data relating to orders in financial instruments. A final report on this consultation will be published by end of Q2 2025.
• In 2025, ESMA will continue the work commenced in 2024, to put in place the selection procedure of the CTPs for bonds and equities in the EU. By mid-2025, ESMA plans to start the authorisation process of the first bond CTP in the EU.

 Priority 5 – European Market Infrastructure Regulation (EMIR)

• In 2024, ESMA conducted a stress test for Central Counterparties (CCPs) which confirmed that the CCPs have strong defences to withstand market shocks, appear resilient to liquidity stress events and have started to integrate climate risk into their stress testing framework. In total, 16 CCPs were covered by this exercise.
• In 2025, ESMA will continue to supervise third country Central Counterparties (CCPs) and ensure their compliance with EMIR through stress tests, risk model validation and annual reviews.
• Also in 2025, ESMA expects to develop technical standards in relation to the clearing obligation of EMIR which includes the clearing obligation, the clearing threshold and the risk mitigation technique requirements.

How can we help?

Our Prudential Risk experts recognise that regulations remain a pivotal driver for the strategic priorities of financial institutions. Our team excels at helping clients within the financial services sector to navigate the intricate web of regulations. We work in tandem with our clients to identify their regulatory responsibilities and develop strategies for full compliance.

This is the fourth article in a four-part series outlining the strategic priorities of European Supervisory Authorities for the financial sector. You can catch up the earlier instalments below: 

Article 1: EBA Strategic Priorities for 2025

Article 2: EIOPA Strategic Priorities for 2025-2027

Article 3: ECB Strategic Priorities for 2025-2027