The Financial Services and Markets Authority (FSMA) will lead ESMA's activities in the area of financial innovation. These activities concern, among other things, the supervisory aspects of crowdfunding, virtual currencies and other forms of financial innovation.
ESMA is the European securities and markets authority, of which the Belgian supervisory authority FSMA is a member. ESMA advises the European Commission on financial regulation and contributes to convergence in supervisory practices among national competent authorities, with a view to consistent investment protection within the EU.
ESMA has a committee on financial innovation that was specifically provided for in the EU Regulation establishing the authority. Last week the FSMA was chosen to chair the Financial Innovation Standing Committee (FISC), and will begin leading its activities as from 1 October 2015. ESMA has published a press release to this effect.
Within ESMA, the FISC provides advice on the development of guidelines and recommendations, on product intervention and on regulatory action to be taken to prevent unsuitable financial innovations, which may be detrimental to consumers and may constitute a threat to financial stability. The committee also monitors and analyses trends regarding financial innovations and reports on its findings.
Topics that may be treated by the committee include structured products, crowdfunding, virtual currencies, contingent convertible instruments, etc. Based on the work carried out by FISC, ESMA recently published a set of good practices for structured products governance and highlighted potential improvements in the European regulatory framework applicable to investments via crowdfunding.