European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority (ESMA) is an independent EU authority based in Paris which seeks to safeguard the stability of the EU’s financial system. ESMA achieves this by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, and by increasing investor protection.

Following the 2008 global financial crisis, it was agreed that the EU’s supervisory arrangements should be strengthened both to better protect its citizens and to rebuild trust in the financial system. These arrangements would focus both on individual firms (e.g. banks and insurance companies), and on the stability of the financial system as a whole.

As a result, the European system of financial supervision was established in 2011. It comprises:

• 3 European supervisory authorities:
  • ESMA,
  • European Banking Authority,
  • European Insurance and Occupational Pensions Authority;
• the European Systemic Risk Board (ESRB);
• the Joint Committee of the European Supervisory Authorities;
• the national supervisory authorities.

In 2019, the review of the European system of financial supervision led an update of the existing legislation, which:

• improves the governance and convergence powers of ESMA;
• strengthens the capacity of ESMA to promote and ensure consistent supervision and uniform enforcement of the law in the EU;
• attributed new direct supervisory powers to ESMA.

SEE ALSO

• Economic governance
• European Banking Authority (EBA)
• European Insurance and Occupational Pensions Authority (EIOPA)
• European Supervisory Authorities (ESAs)
• European Systemic Risk Board (ESRB)
• European Systemic Risk Board (ESRB) (summary)
• European Securities and Markets Authority (summary)
• European Securities and Markets Authority (ESMA)
• European system of financial supervision (European Commission)
• European Systemic Risk Board (European Systemic Risk Board).