ESMA

The European Securities and Markets Authority (ESMA) represents an independent regulator in the European Union (EU).

As one of its key authorities operating in the bloc, it is responsible for the safety, security, and stability of the EU’s financial system whose mandate is protecting the public.

ESMA was established in early 2011, having since policed the European securities sector since its inception, based out of Paris.

The group’s primary mission is to contribute to the effectiveness and stability of the EU financial system.

In addition, ESMA aims to ensure the integrity, transparency, efficiency, and orderly functioning of securities markets, fostering investor protection.

ESMA also promotes supervisory convergence among securities regulators and financial sectors. This is primarily accomplished via its work with other EU supervisory authorities.

What Does ESMA Do?

While ESMA is an independent authority, the regulatory body does have full accountability towards the European Parliament.

Representatives regularly appear before the Economic and Monetary Affairs Committee, at their request for formal hearings.

ESMA helps safeguard investors by assessing risks, markets, and financial stability.

This is done by searching for or detecting emerging trends, threats, and vulnerabilities, and where possible opportunities in a timely fashion.

ESMA can also utilize its position to identify market developments that threaten financial stability, investor protection, or the orderly functioning of financial markets.

ESMA’s risk assessments build on and complement risk assessments made by other authorities and studies.

In doing so, ESMA helps police a unified EU single market, creating a level playing field for investors and issuers.

Insights gained from risk assessment feed into the work on the single rulebook, supervisory convergence, and direct supervision, and vice versa.