The European Securities and Markets Authority (ESMA) will make artificial intelligence and tokenization the initial focus of a new supervisory priority on digital innovation starting in 2027. National regulators will identify client-facing uses of these technologies, document how firms use them in products and processes affecting investors, and conduct initial checks on a subset of the most affected firms. ESMA has identified biased or misleading AI outputs, products investors may struggle to understand, and reliance on a limited number of third-party providers as key risks to monitor. This initiative, designated as a Union Strategic Supervisory Priority (USSP), will run alongside an existing priority on cyber and operational resilience launched in 2025, while the ESG disclosure priority is being closed this year.
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