ESMA Introduces COVID-19 Action Plan

Market participants need to prepare for the impact of COVID-19

The European Securities and Markets Authority (ESMA) and the National Competent Authorities (NCAs) are closely monitoring the situation of the continuing impact of the COVID-19 outbreak on financial markets in the European Union.
Following a Board of Supervisors discussion, in which the market situation was examined and contingency measures were taken by supervised entities, ESMA recommends to financial market participants to get ready to apply their contingency plans.

Those include the deployment of business continuity measures to ensure operational continuity in line with regulatory obligations.

 

ESMA also advises issuers to disclose as soon as possible any relevant information concerning the impact of COVID-19 on their fundamentals, prospects, or financial situation, according to their transparency obligations under the Market Abuse Regulation.

 

Issuers should provide transparency on the actual and potential impacts of COVID-19, to the extent possible based on both a qualitative assessment on their business activities, financial situation, and economic situation in their 2019 year-end financial report, ESMA says.

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Furthermore, asset managers should continue to apply the requirements on risk management and react accordingly, ESMA recommends.

 

In coordination with NCAs, ESMA continues to monitor developments in financial markets as a result of the COVID-19 situation and is prepared to use its powers to ensure the orderly functioning of markets, financial stability, and investor protection, the statement says.

Emergency measures

On March 11, the World Health Organization (WHO) declared COVID-19 a pandemic.
WHO director-general Dr.Tedros Adhanom Ghebreyesus said at a media briefing yesterday, that this is not just a public health crisis, but a crisis that will touch every sector.
“Every sector and every individual must be involved in the fight,” he stated.
 
According to sources in the market, banks, large fintech firms, and their clients have started splitting their operations into three parts:
One third of employees are going to work from home, one third will keep working at the office, and another third will work on the disaster recovery side.
The latter will be needed in case of emergency to allow the business to still operate as usual under exceptional circumstances.
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