European Securities and Markets Authority
|European Securities and Markets Authority
|Carlos Tavares, Vice-Chairman
|Securities market regulation
The European Securities and Markets Authority (ESMA) is an independent European Union regulatory agency that oversees European securities trading. It came into force Jan. 1, 2011 as part of a new regulatory framework adopted by the EU in the wake of the financial crisis. It is one of three bodies that oversee financial activities for European banks, markets, insurances and pensions. The other agencies are the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).
ESMA replaced the Committee of European Securities Regulators (CESR). During CESR's regulatory oversight, supervision had remained mostly at the national level, often making financial regulation throughout the EU member countries uneven and uncoordinated. Due to the events of the 2008 financial crisis, it was determined that CESR's regulatory supervision contained serious shortcomings, and should be replaced with a regulatory agency that could implement financial reform across the EU, and could do so at a faster rate.
Therefore, the European Commission brought forward proposals to create the three new regulatory agencies (ESMA, EBA, and EIOPA) in September 2009, and on September 22, 2010 the European Parliament voted the legislation through. All three agencies will be able to mediate among national financial supervisors as well as impose temporary bans on risky financial products and activities. They can also impose decisions directly on financial institutions in order to remedy breaches of EU law when national supervisors fail to act.
Although ESMA retains all of the functions that CESR was responsible for, ESMA has a number of new competencies and powers, including:
- The ability to draft technical standards that are legally binding in EU member states
- The ability to launch a fast track procedure to ensure consistent application of EU law
- New powers in resolving disagreements between national authorities
- Additional responsibilities for consumer protection (including the ability to prohibit financial products that threaten financial stability or the orderly functioning of financial markets for a period of three months)
- Emergency powers; participating in Colleges of Supervisors and on-site inspections
- Monitoring systemic risk of cross border financial institutions
- A new supervisory role (in particular for credit rating agencies)
- The ability to enter into administrative arrangements with supervisory authorities, international organizations and the administrations of third countries
- January 11, 2011: At its inaugural meeting, ESMA appointed Carlos Tavares vice-chairman and temporary chair of the authority until a full-time appointment is made. Six other board members were also elected.
- January 13, 2011: ESMA appointed Steven Maijoor as its first chair following a vote by ESMA’s board of supervisors. Before taking up his duties, Maijoor the European Parliament will review his appointment, and has up to one month to object to his designation.
- April 1, 2021: Steven Maijoor stepped down from ESMA to join the governing board of the Dutch Central Bank, where he will be responsible for banking supervision.
- The European Commission’s proposals in a nutshell. Dow Jones Financial News.
- Frequently Asked Questions - A Guide to Understanding ESMA. ESMA.
- Three New European Financial Watchdogs Start Work. English.news.cn.
- ESMA names Tavarez as temporary chair. Financial Times.com.
- Steven Maijoor is selected as ESMA’s first Chair. ESMA.
- ESMA’S STEVEN MAIJOOR STEPS DOWN TO JOIN DUTCH CENTRAL BANK. Finance Feeds.