Despite the implementation of the Markets in Financial Instruments Regulation (MiFIR), “actual transparency regarding trading activity remains very limited,” says Verena Ross. In an interview with the European Central Bank (ECB), the chair of European Securities and Markets Authority (ESMA) addresses hot-button topics including transparency in OTC derivatives, MiCA, and strengthening the resilience of CCPs.

On MiFIR and transparency in OTC derivatives

The transparency regime in the EU “stands in stark contrast to the approach in the US,” Verena Ross points out. In the US, transparency requirements cover a broad range of OTC derivatives, while in the EU, “the scope is ambiguous” and “only a small number of transactions are subject to the transparency regime at all”. In addition, transactions are published close to real time in the US, while transactions in the EU are usually published after a significant delay.

ESMA will thus strive for “a more ambitious transparency regime as part of the MiFIR review and continue to argue for enhanced transparency in the OTC derivatives markets.


On strengthening the resilience of CCPs

Part of ESMA’s 2023-2028 strategic priorities is to “enhance the stability and effectiveness of EU capital markets,” Verena Ross states. This includes a focus on the resilience of the overall market infrastructure, which, in turn, includes CCPs. The surge in initial margins during Covid-19 and the energy crisis has prompted a proposal for changes to existing regulatory standards. The aim is to mitigate procyclical effects and prevent liquidity stress from spreading to other parts of the financial system.

The 2022 CCP stress test assessed CCPs’ exposure to third-party service providers for the first time. A Digital Operational Resilience Act (DORA) based on the test is now being prepared.


Describing the current crypto asset market as “a patchwork of national regimes”, Verena Ross says that MiCA will bring “a uniform regulatory framework across markets in the EU” and that the framework is “intended to provide consumer protection, enhance market integrity, and promote financial stability”. Despite being “a step forward”, she warns that MiCA “does not provide the same protection as for traditional financial products”.

On sustainable investments and greenwashing

ESMA, along with two European supervisory authorities (ESAs), have developed a “high-level understanding of greenwashing” that should “serve as a shared reference point for market participants and regulators”.

Addressing concerns that the European ESG framework is too complex, Verena Ross points out that “Integrating complex and multi-faceted environmental and social considerations into finance inevitably entails a certain level of complexity”. Regulations such as the Corporate Sustainability Reporting Directive (CSDR) and the European Sustainability Reporting Standards (ESRS) should eventually improve the situation.

However, she agrees that more can be done in “improving the practicality of the current EU framework, addressing inconsistencies across regulatory requirements, and reducing complexity for investors”. This is already a part of ESMA’s 2023-2028 strategy, falling under the objective of enabling sustainable finance.