European Securities and Markets Authority (ESMA): 10 years on

ABBL Published 01.04.2021

The establishment of the European Securities and Markets Authority in 2011 marked a change in the European financial markets supervision. ESMA was set up as part of the European System of Financial Supervision (ESFS) and succeeded the Committee of European Securities Regulators (CESR).

On 23 March, the ESMA 10th Anniversary Conference focused on ESMA’s achievements, the future of European capital markets and the challenges the Authority would have to face in the coming years.

Steven Maijoor, in his last week as Chair, stressed the importance of ESMA’s contribution in investor protection and in preserving stable financial markets. Moreover, he argued that the areas in which ESMA has played a crucial role in the last years have been:

  1. The supervision of Credit Rating Agencies
  2. Ensuring investor protection and financial stability
  3. Promoting the convergence of supervisory practices.

The discussion with the panelist also highlighted that one of the biggest challenges but also achievements of ESMA has been the management of Brexit and the separation of the UK market.

10 years later, ESMA’s role has evolved. In the coming years, ESMA would have to face several challenges. For instance, it will have to respond to the challenges presented by both digital and sustainable finance. Despite new challenges, the old argument of fragmentation remains still valid. Panelists also agreed that in the coming years, ESMA would have to work more in order to strengthen supervisory convergence.

ESMA plans to achieve this through assessing risks to investors, markets and financial stability, completing the single rulebook and promoting supervisory convergence.

A recurring issue brought up by participants at the conference was the potential attribution of further targeted direct supervisory powers. The topic is nevertheless contested and doesn’t find unanimous support neither among stakeholders nor among decision makers.

On the more general issue of supervision in the EU and as a follow-up to point 16 of the CMU action plan, the European Commission launched a public consultation “on the supervisory convergence and the single rule book”. Deadline: 21 May 2021.

By Sofia Badari

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