The Securities and Markets Stakeholders Group (SMSG) is an advisory body to ESMA, the European Securities and Markets Authority. I participated in its work for five years (2019–2024), and in January I was appointed again. The SMSG consists of representatives of financial institutions, market infrastructures, companies, investors, financial services consumers, and academia. We consult on draft acts issued by ESMA and advise representatives of supervisory authorities from individual Member States.
Of course, we deal with many topics, and sustainability and sustainable finance are just one of them. However, earlier - particularly in the years 2021–2024 - this topic clearly dominated. No wonder: this was the period when the main regulations shaping the sustainable finance system in the European Union were being developed. Today the system is complete: we have Level 1 acts (regulations and directives) and the implementing acts issued on their basis (delegated regulations, standards, and guidelines).
The deregulation carried out through the Omnibus does not apply to financial institutions. In fact, I should put it differently: it does apply, but only with regard to the availability of primary data, i.e. data originating from companies. Institutions have reacted to this rather indifferently. They need specific data from companies, and since most companies will no longer publish it in mandatory reports, it will have to be provided in other ways, most often by filling in various questionnaires or via professionally data providers.
So what are institutions interested in? More or less the same as before: climate-related risks, emissions and decarbonisation, the application of due diligence processes, and impact on nature. From conversations with my colleagues in the SMSG, I get the impression that the last two topics are gaining importance.
There are two other topics of greater excitement. One is the integration of European capital markets, which, despite reforms over the years, are still highly fragmented, making it difficult for European companies to raise capital. We are going round in circles with this integration: member states demand that the Commission come up with proposals that will effectively integrate the European market, the Commission makes these proposals, after which they are rejected or watered down in the legislative process by the same member states that demanded reforms. And we are back to square one 😉 .
The second topic is newer and therefore much more interesting: the role of artificial intelligence in capital markets and the associated risks and opportunities. It is more interesting because it is, in principle, almost unexplored, and yet it raises many questions:
- To what extent are companies’ annual reports produced using artificial intelligence models?
- Is the supervision exercised by management and supervisory boards over published data still real, or has it already become merely symbolic?
- How effective is auditing carried out with the use of AI?
- What do the models used by investors read from reports, and how do they make decisions on that basis?
- Who bears responsibility towards retail investors for investment decisions made by artificial intelligence, and how are those investors informed about the associated risks?
- To what extent can AI help supervisory authorities detect crimes in capital markets committed using AI?
Artificial intelligence in capital markets is an extremely dynamic field (this is a bit of a truism, as the pace of change in AI models in general is very high, not just in this one industry). From a sustainability perspective, the topics fall into the areas of governance and consumer relations. And from the perspective of all of us, it concerns the security of our savings and investments 😊
P.S. If the changes resulting from the Omnibus interest you, and you are particularly curious about what has changed in the simplified ESRS standards, we at MATERIALITY ACADEMY have just A new, super condensed and, as usual, very specific course titled... Simplified ESRS Standards 😊
Polish 
English