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The European Securities and Markets Authority says it will launch a Union Strategic Supervisory Priority on digital innovation from 2027. Working with national regulators, it will initially focus on supervised entities’ use of artificial intelligence and tokenisation; details of the supervisory work have not yet been specified.
The European Securities and Markets Authority (ESMA) will introduce a Union Strategic Supervisory Priority on digital innovation from 2027, coordinating with national regulators to examine how supervised financial entities use artificial intelligence and tokenisation. The initiative is intended to help supervisors build the expertise and capacity to oversee new technologies while protecting investors and maintaining safeguards, ESMA said.
ESMA said its initial supervisory focus will be on the use of AI and tokenisation by entities under its and national authorities’ supervision. The authority did not name particular firms, set out specific supervisory actions or provide a timetable for those actions in its announcement. It said the priority would remain flexible as technologies develop.
The new initiative will run alongside the existing Union Strategic Supervisory Priority on cyber and operational resilience, which has been in place since 2025. ESMA said it and national competent authorities would continue coordinating on technology-related challenges, including those linked to advanced models such as frontier AI.
ESMA also said it is concluding its supervisory priority on environmental, social and governance (ESG) disclosures, launched in 2023. The regulator described progress in improving disclosures and helping investors understand sustainability information and receive quality advice, while saying ESG remains a long-term effort.
How EU Firms’ Technology Will Be Scrutinized
The new priority signals that supervisors across the EU intend to direct attention and resources toward technology use in financial markets. For firms under supervision, AI and tokenisation are set to be the initial areas of focus, although ESMA has not yet detailed what checks, reporting requests or supervisory outcomes firms might face.
ESMA describes Union Strategic Supervisory Priorities as tools for supervisory convergence: they help regulators coordinate on high-risk issues considered important to investor protection, financial stability and orderly markets. A common priority can align national authorities around shared concerns while they oversee entities in their respective jurisdictions. The announcement does not set out new rules or establish that any particular use of AI or tokenisation has caused harm.
Three EU Supervisory Priorities in Motion
Union Strategic Supervisory Priorities are ESMA’s mechanism for coordinating oversight of selected risks across the EU. The authority says they guide supervisory resources toward areas of strategic importance, with the aim of improving convergence among national competent authorities.
The digital innovation priority will add to the cyber and operational resilience priority launched in 2025. At the same time, ESMA says it is bringing the ESG disclosures priority, launched in 2023, to a close this year. The announcement frames that conclusion as a milestone in disclosure work, not the end of attention to sustainability information.
“The digital innovation USSP aims to ensure supervisors have the expertise and capacity to oversee the use of new technologies.”
— European Securities and Markets Authority
Supervisory Methods Still Unspecified
ESMA has not yet explained how the priority will be carried out in practice. Its announcement gives no detailed work plan, milestones, assessment criteria or guidance on how national authorities will divide tasks. It also does not specify which types of AI systems, tokenised assets or business activities may receive particular attention.
The regulator’s reference to frontier AI indicates that advanced models are among the challenges it expects to address through ongoing coordination. The announcement does not identify specific models, risks or measures. It remains unclear when ESMA will publish further details or whether the priority will lead to changes in supervisory expectations for firms.
Further Details Before 2027
The digital innovation priority is due to begin in 2027. ESMA says it will work with national competent authorities and adjust its focus as technological developments emerge. Its announcement does not provide interim dates or name a next publication. Firms and investors will need further communications from ESMA and national regulators to understand the scope and practical effects of the supervisory work.
Key Questions
When does ESMA’s digital innovation priority begin?
ESMA says the new Union Strategic Supervisory Priority will begin in 2027. It has not announced a more specific start date.
Which technologies will supervisors initially focus on?
The initial focus will be how supervised entities use artificial intelligence and tokenisation, according to ESMA.
Does the announcement introduce new rules for financial firms?
ESMA announced a supervisory priority, but did not announce new rules or describe specific compliance requirements in the source material.
What other supervisory priorities will continue?
The digital innovation priority will run alongside the cyber and operational resilience priority, in place since 2025. ESMA says it is concluding its ESG disclosures priority, launched in 2023.
Source: primary
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