European Securities and Markets Authority (ESMA)
European Union Electricity Market Glossary

 


 

 

ESMA (the European Securities and Markets Authority) is an independent EU authority established on 1 January 2011.

 

ESMA works closely with the other European Supervisory Authorities responsible for banking (EBA), insurance and occupational pensions (EIOPA), and the European Systemic Risk Board (ESRB) - together forming the overall European System of Financial Supervision (ESFS).

 

The System is a network that brings together European and national regulators and supervisory authorities from across the EU.

 

ESMA's mission is to enhance the protection of investors and promote stable and well-functioning financial markets in the EU.

 

As an independent institution, ESMA achieves this aim by building a single rule book for EU financial markets and ensuring its consistent application across the EU.

 

"At the time of the crisis, it was ESMA's predecessor, the Committee of European Securities Regulators known as CESR. This was an advisory committee to the European Commission, made up of European securities regulators and supported by a small secretariat in Paris. Principally, it was a means of bringing together regulators and helping them prepare guidance to bring some consistency to EU rules where it was most needed.

 

However, what CESR did not have – and this is the crucial point - was any meaningful powers. It was 'a soft' approach to regulation, done on a voluntary basis by national regulators and when the crisis broke, it was an approach that proved insufficient.

 

ESMA, in contrast to CESR, has been cast from a very different mould: it is an independent, specialised EU authority with rule-making powers, supervision powers and powers to respond to stability risks. In short, the crisis led to the creation of EU financial bodies with teeth, independence and - highly important - staff to carry out their new roles. Since 2011 our headcount has increased from about 40 staff to over 200 staff today.

 

Our rule-making powers are used in developing rules that contribute to what we call the EU Single Rulebook. The purpose of the Single Rulebook is to harmonise technical details where it matters so that there are single standards, critical if the EU is to have a truly single market in financial services. Also, the Single Rulebook is a requirement to avoid regulatory competition.

 

Creating ESMA and the other European Supervisory Authorities in 2011 was a real paradigm shift: something, I think, that could only have been achieved on the back of a major crisis when everyone saw there was a need for change and the arguments against a more robust framework no longer stacked up."

 

Steven Maijoor ESMA Chair, Financial News 20th Anniversary Awards for Excellence, European Finance, 1996 - 2016, 26 May 2016, ESMA/2016/739

 

 

ESMA contributes to the regulation of financial firms with a pan-European reach, either through direct supervision or through the active co-ordination of national supervisory activity.

 

 

ESMA's organisation and governance

 

 

ESMA's governance and management is welll depicted in the ESMA's document of 29 September 2015 (ESMA/2015/1475).


ESMA is governed by the two decision-making bodies: the Board of Supervisors and the Management Board.

 

ESMA has a full-time Chair, Steven Maijoor, and an Executive Director, Verena Ross. Both are based at ESMA's premises in Paris.

These are five-year terms subject to one-off renewal.

 

The Chair is responsible for preparing the work of the Board of Supervisors and chairs both the meetings of the Board of Supervisors and the Management Board. He also represents the ESMA externally.

 

The Executive Director is responsible for the day-to-day running of the ESMA, including staff matters, developing and implementing the annual work programme, developing the draft budget of the Authority and preparing the work of the Management Board.

 

ESMA's Board of Supervisors

 

In addition to the ESMA Chair, the Board of Supervisors is currently composed of the heads of 28 national authorities with the European Commission, EBA and EIOPA and the ESRB as non-voting members. In addition, Norway, Iceland and Liechtenstein are invited to attend as permanent observers.

 

The Board guides the work of the ESMA and has the ultimate decision-taking responsibility regarding the approval of Technical Standards and enforcement action and the adoption of ESMA's guidelines, opinions and any other decisions, including the issuance of advice to the EU institutions.

 

ESMA's Management Board

 

In addition to the ESMA Chair, the Management Board of ESMA is composed of six members selected from the Board of Supervisors by its members. The Vice-Chair, Executive Director and a representative from the European Commission attend as non-voting participants (except on budget matters where the European Commission has a vote).

 

The main role of the Management Board is to focus on the management aspects of the ESMA, such as the development of a multi-annual work programme, the budget and staff resources.

 

ESMA's Securities and Markets Stakeholder Group

 

The Securities and Markets Stakeholder Group was established under ESMA's founding Regulation to help facilitate consultation with stakeholders in areas relevant to ESMA's tasks. ESMA is required to consult the Group on its draft guidelines and Technical Standards.

 

The Group is composed of 30 members appointed by ESMA for a period of two and a half years. They variously represent financial market participants and their employees, consumers and other retail users of financial services, academics and small and medium-sized enterprises.

 

 

ESMA's founding regulation

 

 

ESMA's founding legislative act is the Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC.

 

Other ESMA's founding documents are available at this ESMA's website.

 

 

Links

 

 

List of ESMA Guidelines as of 7 April 2017

 

 

Documentation

 

 

European Commission website on decentralised agencies

 

Joint Statement of the European Parliament, the Council of the EU and the European Commission on decentralised agencies, 19.7.2012

 

Report from the Commission, Progress report on the implementation of the Common Approach on EU decentralised agencies, 24.4.2015 COM(2015) 179 final

 

 

 

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Last Updated on Thursday, 11 May 2017 19:52
 

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