ESMA is the EU’s financial markets regulator and supervisor and is a vital regulatory body in the European Union (EU). It was established in 2011 and is headquartered in Paris. It plays a crucial role in maintaining the stability and integrity of the EU’s financial system.
ESMA’s mission
Its mission is to enhance investor protection, promote orderly financial markets and safeguard financial stability.
ESMA’s history and formation
ESMA was formed following the 2009 de Larosière report, which recommended creating a regulatory body to oversee the EU’s financial markets. It succeeded the Committee of European Securities Regulators (CESR), inheriting its responsibilities while expanding its mandate to include additional regulatory functions.
ESMA’s strategic priorities
Fostering effective markets and financial stability
- Fair, orderly and effective markets
- Contributing to strengthening the stability of the financial system
- Development of the eu single market
- The EU’s voice in the global marketplace
Strengthening supervision of EU financial markets
- Enhanced risk prioritisation and outcome-based supervision
- Strengthening supervisory convergence across the EU single market is a key ESMA objective
Enhancing protection of retail investors
- Investor protection
- Retail investor engagement
ESMA’s thematic drivers
Enabling sustainable finance
- Effectiveness and integrity of ESG markets
- A workable regulatory framework
- Effective and consistent supervision
- Role of retail investors
Facilitating technological innovation and effective use of data
- Technological innovation
- Stepping up the effective use of data across ESMA’s activities
Who does ESMA supervise?
- The EUs CRAs (Credit Rating Agencies)
- TRs (Trade repositories)
- SRs (Securitisation repositories)
- Certain DRSPs (Data Reporting Service Providers)
- Certain benchmark administrators and Tier 2 third-country CCPs (Central Counterparties)
ESMA plays a pivotal role in ensuring the stability and transparency of the EU’s financial markets. Through its regulatory initiatives and strategic priorities, ESMA works to protect investors, foster financial stability, and promote sustainable finance across the European Union.
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