ESAs spring risk update highlights geopolitical pressures and rising private finance risks 27 March 2026 Joint Committee Risk monitoring The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published their spring 2026 Joint Committee update on risks and vulnerabilities in the EU financial system. The update focuses on the challenges arising from ongoing geopolitical tensions and developments in private finance. Geopolitical tensions continue to pose significant risks Th...
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ESMA sets out actions to simplify the retail investor journey and make investing more accessible 12 March 2026 Investor protection Press Releases The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published its takeaways from the 2025 Call for Evidence (CfE) on the retail investor journey. Taking into account the input from stakeholders, ESMA outlines a number of actions and operational improvements it will take forward to make it ea...
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New investment funds drive reduction in costs to investors 03 March 2026 Fund Management Press Releases Risk monitoring The European Securities and Markets Authority (ESMA), the EU financial markets regulator and supervisor, today publishes its 2025 market report on the costs and performance of EU retail investment products . This eighth Costs and Performance report shows that ongoing costs in the EU continued to decline in 2024. This is however mostly due to new investment funds entering the...
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ESMA supports the simplified European Sustainability Reporting Standards and suggests targeted adjustments 18 February 2026 Issuer disclosure Press Releases Sustainable finance The European Securities and Markets Authority, the EU’s financial markets regulator and supervisor, has delivered its opinion on the draft revised European Sustainability Reporting Standards (ESRS) developed by EFRAG. ESMA strongly supports the European Commission’s goal of enhancing competitiveness and growth through ...
ESMA has issued an opinion supporting EFRAG's draft simplified European Sustainability Reporting Standards (ESRS) under the CSRD, praising improvements in readability and materiality focus while recommending targeted adjustments to enhance investor protection and financial stability. This matters for compliance professionals as it signals upcoming refinements to sustainability disclosures, with pragmatic supervision promised during the transition, potentially reducing short-term burdens but requiring monitoring of final delegated act adoption by summer 2026.
What Changed
The draft revised ESRS introduce simplifications such as improved readability, language, format, reduced volume of requirements, and a focus on material matters. ESMA recommends specific adjustments before finalization:
Introduce time limits to certain permanent reliefs (e.g., reliefs #3, #4, #9, #11 on quantitative information for anticipated financial effects until FY 2029, and metrics).
Refine requirements on transition plans (e.g., consistent disclosure of absolute financed emissions and contextual information).
Strengthen reporting on sustainability competences of administrative,...
What You Need To Do
- Monitor Commission process
- Assess current reporting
- Enhance governance disclosures
- Review subsidiary exemptions
- Prepare for supervision
Key Dates
Summer 2026 - European Commission aims to adopt revised ESRS into a delegated act, considering ESMA, EBA, EIOPA, ECB opinions.
FY 2029 (reporting in 2030) - End of certain temporary reliefs on quantitative information for anticipated financial effects (if ESMA recommendations adopted).
First years post-adoption (2026+) - Learning curve period with pragmatic NCAs supervision and flexibility in examinations.
Compliance Impact
Urgency: Medium - Not yet finalized (pending summer 2026 adoption), with pragmatic supervision promised, reducing immediate pressure; however, matters due to potential tightening of reliefs and disclosures impacting FY2026+ reporting, investor protection focus, and interoperability needs. Firms should prioritize if heavily using reliefs or with complex transition plans, as non-adjustment risks supervisory scrutiny post-learning curve.
Asset ManagerBankInsurance ESMA publishes latest edition of its newsletter 13 February 2026 ESMA newsletter The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published today its latest edition of the Spotlight on Markets Newsletter. This edition opens with ESMA’s Digital and Data Strategies , outlining how enhanced data use and improved digital tools will strengthen effective and risk-based supervision. Top news highlights include the launch of the selection ...
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The ECB imposed a €7.55 million periodic penalty payment on Crédit Agricole for failing to complete a climate-related and environmental (C&E) risk materiality assessment by the May 31, 2024 deadline, marking the second enforcement action in the ECB's escalating shift from guidance to active enforcement on climate risk supervision. This enforcement demonstrates that the ECB is moving beyond symbolic warnings to substantial financial penalties, signaling that banks must treat climate risk identification and assessment as mandatory compliance obligations rather than discretionary best practices.
What Changed
The ECB's enforcement action reflects several critical regulatory developments:
*Mandatory Climate Risk Materiality Assessment**
Banks must now conduct comprehensive materiality assessments of climate-related and environmental risks as a binding supervisory requirement, not a guidance recommendation. The assessment must identify all material C&E risks to which the institution is or might be exposed.
*Binding Supervisory Decisions with Enforcement Teeth**
The ECB has transitioned from non-binding guidance (2020) to legally binding decisions with accruing daily penalties for non-compliance.
What You Need To Do
- *Immediate (Q1 2026)
- related and environmental risks, documenting exposure across the portfolio
- *Near-term (H1 2026)
- related risks into existing credit risk, operational risk, and market risk frameworks
- testing purposes
Key Dates
2020 - ECB published non-binding Guide on climate-related and environmental risks
2021 - ECB conducted economy-wide climate stress test covering 1,600 eurozone banks
2022 - ECB published guidance on climate stress testing; all significant institutions received feedback letters with staggered timelines
March 2023 - ECB issued binding supervisory decisions to 28 banks with specific compliance deadlines DEADLINE
February 8, 2024 - ECB decision requiring Crédit Agricole to conduct C&E risk materiality assessment
Compliance Impact
Urgency: CRITICAL
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ESMA promotes clarity in communications on ESG strategies 14 January 2026 Sustainable finance The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published today a second thematic note on sustainability-related claims, focusing on ESG strategies. The note concentrates on ESG integration and ESG exclusions, as references to these strategies are often made by market participants and widely referenced in marketing communications directed to ...
ESMA published a thematic note on January 14, 2026, providing guidance on clear, fair, and not misleading communications regarding ESG strategies, specifically ESG integration and ESG exclusions, to mitigate greenwashing risks in non-regulatory materials like marketing. This matters because sustainability claims heavily influence investor decisions, and misleading communications can lead to supervisory actions, reputational damage, and loss of trust, aligning with existing EU rules under SFDR and related frameworks without imposing new disclosures.
What Changed
This is not a formal regulatory change but supervisory guidance reinforcing four principles for non-regulatory communications (e.g., marketing materials, websites, investor presentations, voluntary reports):
Accurate: Claims must fairly represent sustainability profiles without exaggeration, falsehoods, omissions, cherry-picking, vagueness, or misleading ESG terminology/imagery.
Accessible: Information must be easy to understand and navigate, with layered substantiation in electronic formats for retail materials.
What You Need To Do
- Review and update all non-regulatory ESG communications (marketing, websites, presentations, DDQs, PPMs) against the four principles and do's/don'ts
- Define and clearly explain ESG integration/exclusions (e
- Ensure consistency across channels, substantiate claims with accessible evidence, and avoid vagueness or overstatements
- Train compliance/marketing teams; monitor for updates as further thematic notes may follow
- Cross-reference with first note and regulations like SFDR, Cross-Border Distribution Regulation
Key Dates
14 January 2026 - Publication date of the thematic note on ESG strategies (second in series).
1 July 2025 - Publication of ESMA's first thematic note on ESG credentials (to be read in combination).
Compliance Impact
Urgency: High – Immediate risk of enforcement for greenwashing in high-visibility ESG marketing, amid rising supervisory scrutiny; non-compliance threatens fines, remediation, and reputational harm as investor focus on sustainability grows. Proactive alignment builds trust and differentiates firms.
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ESAs publish joint Guidelines on ESG stress testing 08 January 2026 Guidelines and Technical standards Joint Committee The European Supervisory Authorities (EBA, EIOPA and ESMA - the ESAs) published today their Joint Guidelines on environmental, social, and governance (ESG) stress testing . These Guidelines provide national insurance and banking supervisors with clear guidance on how to integrate ESG risks into supervisory stress tests, both when using established frameworks and when conducti...
The European Supervisory Authorities (ESAs)—EBA, EIOPA, and ESMA—published final Joint Guidelines on 8 January 2026 to standardize how national competent authorities (NCAs) integrate ESG risks into supervisory stress testing frameworks for banking and insurance sectors, without mandating new ESG-specific tests. These guidelines promote consistency, long-term methodologies, and common standards across the EU, initially prioritizing climate and environmental risks (physical and transition) before expanding to social and governance factors. They matter for compliance professionals as they shape future supervisory expectations, enhancing resilience assessments and aligning with CRD (Article 100(4)) and Solvency II (Article 304c(3)) mandates, potentially influencing firm-level stress testing preparations.
What Changed
Standardized Integration of ESG Risks: NCAs must embed ESG risks into existing supervisory stress tests or ad-hoc assessments, using a risk-based materiality assessment to scope relevant risks, starting with environmental factors.
Methodological and Governance Guidance: Outlines design for ESG-inclusive tests, including objectives (e.g., capital/liquidity robustness, strategy resilience), scenario analysis, and organizational arrangements; promotes flexibility for data/model improvements.
No New Obligations: Does not require NCAs to conduct dedicated ESG stress tests, but ensures consistency...
Key Dates
08 January 2026 - Publication of Final Report and Joint Guidelines by ESAs .
10 January 2026 - Statutory deadline for ESAs to publish guidelines per CRD Article 100(4) and Solvency II Article 304c(3) .
Two months after official EU translations (expected ~March/April 2026) - NCAs notify respective ESAs of compliance or intent to comply .
01 January 2027 - Application date of Joint Guidelines for NCAs .
Compliance Impact
Urgency: Medium. While not imposing immediate firm-level requirements, the guidelines signal escalating supervisory focus on ESG risks from 2027, with potential for more frequent/punitive stress tests; firms delaying ESG integration risk capital/liquidity shortfalls in exercises, amplified by improving data availability and EU sustainability push (e.g., CSRD, SFDR). Proactive preparation mitigates future remediation costs and supports strategic resilience.
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New Q&As available 19 December 2025 Digital Finance and Innovation Fund Management Market Abuse Prospectus Sustainable finance The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, has published or updated the following Questions and Answers: Alternative Investment Fund Managers Directive (AIFMD) Directive Exclusion related to UNGC/OECD Guidelines (2734) Environmental, Social and Governance (ESG) rating activities Regulation Group-affiliated small ESG ra...
ESMA published new Q&As on December 19, 2025, addressing practical implementation questions across multiple regulatory frameworks including AIFMD, ESG rating activities, and sustainable finance rules. These guidance documents clarify regulatory expectations and promote consistent supervisory approaches across EU member states, making them essential for firms operating in affected areas to ensure compliant implementation.
What Changed
The December 19, 2025 Q&A publication covers several regulatory domains:
AIFMD Exclusion Criteria: New guidance on the UNGC/OECD Guidelines exclusion (Q&A 2734), clarifying when alternative investment fund managers must apply exclusion-related requirements
ESG Rating Activities: Updated Q&As addressing regulatory requirements for ESG rating providers, including clarification on group-affiliated small ESG rating activities
Sustainable Finance: Continued development of guidance under SFDR and related sustainability disclosure frameworks
Digital Finance and Innovation: Guidance supporting...
What You Need To Do
- *Immediate (0-30 days)
- *Short-term (1-3 months)
- level information
- advertised securities per Annex 21 requirements
Key Dates
19 December 2025 - ESMA published new Q&As across multiple regulatory domains
30 June 2025 - ESMA's final report on prospectus ESG disclosure requirements became effective (referenced in search results as June 6, 2025 publication date)
22 September 2025 - ESMA published updated consolidated Q&A on SFDR and Level 2 Regulation with new PAI disclosure guidance
17 October 2025 - ESMA updated MiCAR Q&As on execution service classification
2025 Q&As. Firms should consult ESMA's official guidance portal for specific transition periods.*
Compliance Impact
Urgency: HIGH
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ESMA reviews impact of Guidelines on ESG or sustainability related terms in fund names 17 December 2025 Risk monitoring Sustainable finance The European Securities and Markets Authority (ESMA), the EU’s financial market regulator and supervisor, released research today assessing the impact of its fund naming guidelines on ESG and sustainability-related terms. The study found that ESMA’s Guidelines have: Improved consistency in the use of ESG terms by increasing alignment of fund names and the...
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