The European Commission proposed this Thursday, 4, to give more powers to the European Securities and Markets Authority (ESMA) to monitor financial players such as stock exchanges and cryptoactive service providers.
At issue is a package released today in Brussels to make European Union (EU) financial markets more integrated, within which the community executive wants to “resolve inconsistencies and complexities resulting from fragmented national approaches, making supervision more effective and favorable to cross-border activities and responding at the same time to new risks”.
Arguing that “improvements in the supervisory framework are closely linked to the removal of regulatory barriers”, the institution proposes to transfer to ESMA “direct supervisory powers over significant market infrastructures”, such as certain trading platforms including the largest stock exchanges, linked clearing houses, central securities depositories and all crypto-asset service providers.
This would allow the European financial markets regulator, for example, to resolve disputes between national regulators.
Furthermore, the institution wants to “strengthen ESMA’s coordinating role in the asset management sector”.
The EU operates with a dispersed financial infrastructure as there are dozens of stock exchanges, several clearing houses and many central depositories operating separately.
Furthermore, supervision is not centralized as each country has its own regulator, which means that the management of community markets is fragmented and unequal.
This fragmentation is also reflected in the structure of the markets themselves: in 2024, the EU’s market capitalization corresponded to just 73–80% of GDP, well below the 270–320% in the United States, revealing less integrated markets.
Furthermore, company financing through capital markets remains significantly lower than the North American model, highlighting how the EU’s regulatory and supervisory heterogeneity still limits the development of a true single European market.
At a press conference in Brussels, the European Commissioner for Financial Services and the Savings and Investment Union, Maria Luís Albuquerque, defended “a European market that works better for everyone”, without the EU “wanting to copy the North American model”.
“This [proposta hoje apresentada] is the most efficient and effective way […] and all the evidence indicates that we need this integration”, he added.
ESMA is the EU regulator responsible for strengthening investor protection and ensuring the stability and transparency of financial markets.
In the “comprehensive package of measures aimed at removing barriers and unlocking the full potential of the EU single market for financial services”, published today, the community executive also proposes to eliminate barriers to integration in the areas of trading, post-trading and asset management, remove regulatory barriers to innovation and reduce regulatory burdens.
This mandate from the European Commission aims to increase the EU’s economic competitiveness against its main competitors, such as the United States.
The proposed package will now have to be negotiated and approved by the European Parliament and the Council, with some countries (such as financial centers such as Luxembourg and Ireland) fearing giving up national supervisory powers.