What’s Going On?
The European Securities and Markets Authority (ESMA) has budgeted over €1 million to track trends in financial innovation and crypto assets in 2019.
Why Does It Matter?
The spend is part of a €48 million project to supervise a broader range of activities in the watchdog’s 2019 work programme, reported FinExtra.
ESMA says the ongoing monitoring of fintech innovation and retail investor trends will be conducted by six full-time staff, with the aim of achieving “a coordinated approach to the regulation and supervisory treatment of new or innovative financial activities and provide advice to present to the EU institutions, market participants or consumers”.
So Why Are They Watching?
In order to be ready to take action – according to ESMA’s official documentation for its 2019 Annual Work Programme, the monitoring will help ESMA to play a proactive role in market intelligence gathering and develop metrics that will help when the authority tests its own powers of intervention.
Cointelegraph reported that ESMA had strengthened its requirements for CFDs in March this year. “Due to the specific characteristics of cryptocurrencies as an asset class the market for financial instruments providing exposure to cryptocurrencies, such as CFDs, will be closely monitored, and ESMA will assess whether stricter measures are required,” said a spokesman.
ESMA’s new measures include a ban on the marketing, distribution or sale of binary options to retail investors and a restriction on the marketing, distribution or sale of CFDs to retail investors, reported CoinDesk.