The European Authority


The Hellenic Capital Markets Commission and the European Securities and Markets Authority (ESMA)

ESMA was established on 1st January 2011 according to European Regulation 1095/2010, which was published at the Official Journal of the European Union on 15th December 2010 and succeeded CESR. CESR has been the consultative committee consisted of securities regulatory authorities across Europe and, consulted the European Commission during the period from 2001 to 2010 on policy issues related to securities legislation, while simultaneously fostered regulatory and supervisory convergence.  

ESMA is an independent EU Authority that contributes to safeguarding the stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection.

ESMA's work on securities legislation contributes to the development of a single rule book in Europe. This serves two purposes; firstly, it ensures the consistent treatment of investors across the Union, enabling an adequate level of protection of investors through effective regulation and supervision. Secondly, it promotes equal conditions of competition for financial service providers, as well as ensuring the effectiveness and cost efficiency of supervision for supervised companies. As part of its role in standard setting and reducing the scope of regulatory arbitrage, ESMA strengthens international supervisory co-operation.

Where requested in European law, ESMA undertakes the supervision of certain entities with pan-European reach such as the credit rating agencies and the trade repositories.

ESMA is also responsible for coordinating actions of securities supervisors or adopting emergency measures when a crisis situation arises.

Whilst ESMA is independent, there is full accountability towards the European Parliament where it will appear before the relevant Committee known as ECON, at their request for formal hearings. Full accountability towards the Council of the European Union and European Commission also exists. The Authority will therefore report on its activities regularly at meetings but also through an Annual Report.

ESMA forms part of the European System of Financial Supervison. This system consists of the European Systemic Risk Board (ESRB) and the three European Supervisory Authorities, ESMA based in Paris, the European Banking Authority (EBA) based in London and the European Insurance and Occupational Pensions Authority (EIOPA) based in Frankfurt. The ESRB monitors and assess potential threats to financial stability that arise from macro-economic developments and from developments within the financial system as a whole ("macro-prudential supervision").

ESMA contributes to the work of the ESRB, by providing data and undertaking stress tests in close co-ordination with the fellow ESA's and the ESRB. ESMA is also a voting member of the the ESRB's General Board, along with the other European Supervisory Authorities, the European Commission, the President and Vice-President of the European Central Bank, the Governors of the national central banks, the Chair and Vice-Chairs of the ESRB's Advisory Scientific Committee and the Chair of its Advisory Technical Committee. Along with the two other European Supervisory Authorities, EBA and EIOPA, ESMA forms part of the Joint Committee which works to ensure cross-sectoral consistency and joint positions in the area of supervision of financial conglomerates and on other cross-sectoral issues.

On 29th of May, 2014, the new Multilateral Memorandum of Understanding between national competent authorities of EEA and ESMA (ESMA MMoU) has entered into force. The ESMA MMoU has been signed by 31 regulatory authorities (

The new MMoU has been agreed on the basis of increasing globalization, the need for supervisory convergence and the interdependence of securities regulators and markets across the European Union. It has been designed in such a way as to enhance the terms of cooperation and information exchange between national authorities and between national authorities and ESMA, in relation to the fulfillment of their tasks deriving from the securities legislation applicable in the EU. Moreover, the new ESMA MMoU updated and replaced the MMoU between the national authorities-members of CESR (ex FESCO), which had entered into force on 26th January 1999. 


Legislative work

The European legislative system for the financial markets consists of four stages or levels. Level 1 Directives and regulations, set out the high level political objectives on the area concerned by the legislation. Occasionally, at this early stage, ESMA may be asked for technical advice by the Commission as it develops its legislative proposal.

However, ESMA has been given a greater role in Level 2 in drafting what can be considered as subordinate acts (known as delegated acts and implementing acts). Delegated acts are concerned more with the substantive content of the legislative requirement, for example setting out what authorisation information firms must provide to competent authorities, whilst implementing acts are similar to executive measures giving effect to the substantive requirements, this might include for example, standard forms, templates and procedures for communicating information or processes between competent authorities.

At Level 3, ESMA will develop guidelines and recommendations with a view to establishing consistent, efficient and effective supervisory practices within the European System of Financial Supervision, and to ensure the common, uniform and consistent application of Union Law. The guidelines and recommendations are addressed to competent authorities or financial market participants. Whilst not legally binding, these have been strengthened under ESMA and competent authorities must now make every effort to comply and must explain if they do not intend to comply. Financial market participants can also be required to report publically whether they comply. ESMA will also take other steps under Level 3 to ensure supervisory convergence.

At Level 4, a fast track procedure has been introduced by the Regulation establishing ESMA. On this basis, ESMA now has a new role. At the request of a national competent authority, the European Parliament, Council, Commission or the Stakeholder Group, ESMA can be requested to launch an enquiry and can issue a recommendation addressed to the national authority, within two months of launching its investigation. ESMA will also be able to launch investigations on its own initiative.


How ESMA works


Within ESMA, the Board of Supervisors will take all the policy decisions of ESMA and will approve all work done by ESMA, which will be mainly at level 2, 3 and 4. The Board of Supervisors is composed of the heads of 28 national authorities, with observers from Iceland, Licthenstein and Norway, from the European Commission, a representative of European Banking Authority (EBA) and European Insurance and Occupational Pensions Authority (EIOPA) and one representative of the European Systemic Risk Board (ESRB).

The main role of the Board of Supervisors is to take all policy decisions of ESMA, such as decision on the compliance by national competent authorities with community legislation, interpretation of community legislation, decisions in crisis situations, the approval of draft technical standards, guidelines, peer reviews and any reports which are developed. The Board of Supervisors will also take the final decision on ESMA's budget. The Board of Supervisors will meet at least twice a year, although in reality it is anticipated they will meet far more regularly.

Voting by the Board of Supervisors will be undertaken on a simple majority basis (one vote per national member) for all matters except guidelines and technical standards. In the case of guidelines and standards, voting will be done by qualified majority as set out under the Treaty on European Union. 


The day-to-day work in developing the proposals for approval by the Board of Supervisors will generally continue to be carried out by the Standing Committees established under CESR. These are chaired by senior national representatives, usually a Member of the Board of Supervisors and bring together the national experts with support from the staff of the Authority, who act as rapporteurs for the Committees.


When considered necessary, ESMA may review the Standing Committees in place and if necessary re-organise or establish new Committees.

On formation, the Standing Committee generally establishes a Consultative Working Group of market participants (practitioners, consumers and end-users) to provide technical advice to the expert group during the drafting process. The market participants are experts drawn from across the European Member States. They are not intended to represent national or a specific firms interest and do not replace the important process of full consultation with all market participants and other stakeholders or the specific role of the Securities and Markets Stakeholder Group as set out in the Regulation.


When a document is ready for public consultation, following approval by the Board of Supervisors, it is published on ESMA's website under the section consultations and a public hearing is often organised. In addition, ESMA will formally consult the Securities and Markets Stakeholder Group and any further competent authorities where necessary.
The purpose of ESMA's Standing Committees and groups is also to strengthen the network of regulators in a given area as agreed in a tailored set of terms of reference. Much of the work is therefore also focused on initiatives carried out at Level 3. These include efforts to strengthen co-operation between national authorities to ensure consistent and effective supervision of financial services activities, and enforcement of securities laws in Europe and additional steps to protect investors. As such, these Standing Committee may, for example, develop standards and guidance or share confidential regulatory information based on legal agreements under the Memorandum of Understanding. Where appropriate, a Standing Committee can invite external parties of other relevant supervisory authorities to participate as an observer. The work of ESMA can therefore be found under each of the pages of the relevant standing committee on ESMA's website (


Standing Committees of ESMA

1) Market Integrity Standing Committee (MISC)


The Market Integrity Standing Committee undertakes ESMA's work on issues relating to market surveillance, enforcement of securities laws, facilitation of cooperation of national authorities and exchange of information in market abuse investigations.

Regarding surveillance, the Standing Committee works in order to enhance the efficiency and effectiveness of the market surveillance activities of national authorities, including the use of various market surveillance tools (including analysis of transaction reports). The Standing Committee also provides a forum in which national authorities may share their experiences concerning their market surveillance and enforcement activities.

In the area of cooperation, the Standing Committee works to ensure efficient and timely cooperation in cross-border cases and facilitates sharing of information under the ESMA MMoU.

Finally, the Standing Committee has responsibility for elaborating advice to the European Commission, and technical standards and guidelines and recommendations on issues relating to the integrity of markets (e.g. MAD and short selling).

2) Standing Committee on Secondary Markets

The Secondary Markets Standing Committee undertakes ESMA's work relating to the structure, transparency and efficiency of secondary markets for financial instruments, including trading platforms and OTC markets (regulated markets, MTFs, systematic internalisers, other organised trading platforms and activity of intermediaries in trading platforms).

In particular, the Standing Committee assesses the impact of changes in the market structure to the transparency and efficiency of trading and develops ESMA policy in relation to the issues identified. This applies not only to shares that are currently subject to the Markets in Financial Instruments Directive (MiFID) transparency requirements but also to non-equity financial instrument and commodity markets. The Standing Committee also fosters supervisory convergence among the national authorities in its area of competence.

In terms of policy, the Standing Committee has responsibility for elaborating advice to the European Commission, as well as technical standards, guidelines and recommendations relating to the MiFID provisions applicable to regulated markets, MTFs, systematic internalisers, other organised trading platforms and pre- and post-trade transparency. A consultative working group has been formed to assist the Standing Committee.

3) Post-Trading Standing Committee

Post-Trading Standing Committee undertakes ESMA's work relating to clearing and settlement of transactions in financial instruments, including the roles of financial market infrastructures and any other entities providing post-trading services.

In particular, the PTSC is responsible for elaborating advice to the European Commission, and technical standards and guidelines and recommendations relating to the Regulation on OTC Derivatives, Central Counterparties and Trade Repositories. The PTSC is also responsible for developing ESMA's policy on the regulation of central securities depositories (CSDs) and on the regulatory and supervisory implications of the TARGET2-Securities project. Finally, the PTSC fosters supervisory convergence among the national authorities in its area of competence.


4) Investor Protection and Intermediaries Standing Committee

The Investor Protection and Intermediaries Standing Committee undertakes ESMA's work on issues relating to the provision of investment services and activities by investment firms and credit institutions. Particular regard is made to investor protection, including the conduct of business rules, distribution of investment products, investment advice and suitability.

In terms of policy, the Standing Committee is responsible  for developing and providing technical advice to the European Commission, and for preparing technical standards, guidelines and recommendations relating to the provisions of the Markets in Financial Instruments Directive (MiFID) applicable to investment services and activities. This includes, for example, the authorisation of investment firms, conduct of business, organisational arrangements and pass-porting. The Standing Committee also fosters supervisory convergence among national competent authorities in the area of investment services and activities. A Consultative Working Group has been formed to assist the Standing Committee.


5) Financial Innovation Standing Committee (FISC)


ESMA's Financial Innovation Standing Committee (‘FISC') coordinates the national supervisory authorities' treatment and response to new or innovative financial activities and provides advice to ESMA to when to act. In monitoring financial activities, FISC may advise ESMA to adopt guidelines and recommendations with the aim of promoting regulatory convergence, to issue alerts and warning or conduct any regulatory action needed to prevent financial innovation from causing customer detriment or threatening financial stability. As part of its activities, FISC also collects, analyzes and reports on investor trends.  While aware of when localized financial innovation issues are best addressed by a national authority, when those issues are more widely shared, FISC may make proposals for the co-ordination of national responses.  FISC also contributes to the Joint Committee of European Supervisory Authorities' work on financial activities, financial innovation and consumer related issues.


6) Investment Management Standing Committee

The Investment Management Standing Committee undertakes ESMA's work on issues relating to collective investment management, covering both harmonised and non-harmonised investment funds. The Standing Committee is responsible for elaborating advice to the European Commission, and technical standards and guidelines and recommendations relating to the UCITS (Undertakings for Collective Investment in Transferable Securities) Directive and the AIFM (Alternative Investment Fund Managers) Directive. This work covers the full spectrum of issues addressed by both Directives.

Finally, the Standing Committee also addresses the rules that apply to other key entities, such as depositaries. Beyond the Directives and specific work outlined above, the Standing Committee works more generally to foster supervisory convergence among national authorities in the area of investment management.


7) Corporate Finance Standing Committee

The Corporate Finance Standing Committee is responsible for developing all of ESMA's work relating to the Prospectus Directive and Corporate Governance. Additionally, it carries out ESMA's work with regard to major shareholding disclosures under the Transparency Directive, except in relation to how such disclosures are stored.

The Committee promotes greater efficiency in day-to-day work undertaken by supervisors; increases supervisory convergence and ensures the coherent application of rules across the membership. In terms of developing technical advice and guidance, the Standing Committee has responsibility for elaborating Level 2 advice and Level 3 measures on the provisions of the Prospectus and Transparency Directives. In the area of Corporate Governance, the Corporate Finance Standing Committee will identify and consider a proposed ESMA response to areas which relate to securities (as opposed to company) laws in the European Union, which are of interest and relevance to ESMA and which are not addressed by other ESMA working groups. The Standing Committee also works to increase harmonised implementation of EU legislation. If needed or when requested, the Standing Committee also advises the European Commission on the need for possible changes to the appropriate Level 1 Directives. The Committee also develops ‘Questions & Answers' (Q&A) to continue to deliver greater supervisory convergence and transparency for market participants.

8) Corporate Reporting Standing Committee

The Corporate Reporting Standing Committee conducts all ESMA's work on issues related to accounting, audit, periodic reporting and storage of regulated information.

In particular it:

  • Pro-actively monitors and influences regulatory developments in the area of accounting and auditing, including an active monitoring of the EU endorsement process of international standards and the work of relevant EU accounting and/or auditing Committees.
  • Coordinates the activities of National Enforcers from the European Economic Area relating to the enforcement of compliance with IFRS. This includes notably: 
    • Analysis and discussion of individual enforcement decisions under IFRS and emerging financial reporting issues under IFRS. 
    • Identify issues which are not covered by financial reporting standards or which may be affected by conflicting interpretations for referral to standard-setting or interpretative bodies such as the IASB and IFRIC. 
    • Facilitates the exchange of views and sharing of experiences on methods for supervising the financial information of companies offering publicly securities and/or having these securities listed on an EU regulated market.
  • Pro-actively monitors and influences developments relating to periodic financial reporting under the Transparency Directive.
  • Establishes and maintains appropriate relationships with securities regulators from major capital markets outside Europe, to foster operational cooperation between EU and non-EU regulators on the competences in the remit of the Standing Committee.


9) Credit Rating Agencies Technical Committee

On 7 December 2009, the EU Regulation 1060/09 on Credit Rating Agencies (CRAs) entered into effect. Following the announcement of the creation of ESMA, the CRA Regulation was revised in May 2011 with a view to entrust ESMA with an exclusive responsibility for the registration and supervision of credit rating agencies in the European Union. According to the Regulation, ESMA is also required to draft Regulatory Technical Standards alongside its traditional role of promoting convergence through Level 3 guidelines and recommendations. Furthermore, the Regulation mandates ESMA to maintain a central repository where information on the past performances of CRAs and information about credit ratings issued in the past are to be kept and made public.

Chaired by the Executive Director of ESMA, the Technical committee has been established to assist in preparing ESMA for these new tasks relating to CRAs. In order to fulfil its objectives, the Technical Committee has responsibility for:  

•    Providing advice on policy decisions regarding CRAs to ESMA staff, to the Board of Supervisors or to any other relevant internal committee or panel established under Article 41(1) of ESMA Regulation.
•    Providing advice regarding decisions in the area of CRAs that refer mainly to:

o    the assessment of whether a third country regime includes requirements "as stringent as" those set out in Articles 6 to 12 of the CRA Regulation;
o    the establishment of cooperation arrangements with third country regulators;
o    technical advice to the Commission, the draft technical standards and guidelines and recommendations concerning policy in the area of CRAs;
o    policy or supervisory issue that may have wider implications on which advice is requested.


10) Review Panel of ESMA

Review Panel was established by CESR on March 2003, on the basis of the conclusions reached by the Council of Stockholm. The Review Panel was initially chaired by the current Vice-president of CESR. The Review Panel of ESMA is the successor of CESR's Review Panel and consists of senior executives of national competent authorities. It evaluates the practical implementation of European legislation by ESMA's members, as well as the incorporation of ESMA's technical standards in the legislation of member-States.

The Review Panel operates on the basis of a Decision setting up the Review Panel Protocol and the ESMA Review Panel Methodology. The Review Panel contributes to supervisory convergence through its assessment of the implementation of Union Law in the Member States, and the identification of areas of regulation and supervision where there is room for further convergence. The Review Panel achieves this aim by fostering effective co-operation between National Competent Authorities (NCAs), carrying out reviews and promoting best practices. The main tasks of the Review Panel are to ensure investor protection through an effective single rule book and adequate supervisory practices. The main tool developed by the Review Panel consists of peer reviews. These reviews help:

•    ensure the consistent and timely implementation of EU legislation and ESMA standards and guidelines into national jurisdictions;
•    assess the supervisory practices of the National Competent Authorities, including through on-site visits.

Through the peer review process ESMA provides an independent overall assessment of the supervisory approaches in place at the national competent authorities, including enforcement matters, and identifies good practices. For each peer review an independent assessment group, composed of ESMA staff and experts from NCAs, is set up. The work is based on a mandate approved by the ESMA Board of Supervisors and carried out by using various tools, such as self-assessment questionnaires on the basis of common objective criteria and more recently on-site visits.


11) Committee for Economic and Markets Analysis - CEMA


The Committee for Economic and Markets Analysis (CEMA) has the responsibility to cover two broad areas:

  • Financial markets monitoring and analysis: pro-active identification, monitoring, and assessment from a micro-prudential level of trends, potential risks and vulnerabilities in financial markets across borders and sectors, including a thorough focus on financial innovations and incentives related to market practices both at the wholesale and retail level.
  • Cost-Benefit Analysis / Impact Assessment: contribution to better regulation by actively supporting ESMA's commitment to Impact Assessments of existing and planned / proposed regulation and supervisory practice (ex ante and ex post Cost-Benefit Analyses / Impact Assessments).

12) IT Management and Governance Group

ESMA's IT Management and Governance Group is in charge of the information technology (IT) governance of ESMA. The group steers ESMA IT projects especially those that ESMA undertakes in conjunction with the national authorities. It is composed of senior ESMA representatives who have experience, knowledge and expertise in IT project management, financial markets, and supervisory related issues. The group's main objectives are to lead pan-European IT projects of ESMA to provide ESMA and the national authorities with IT systems and services that help national competent authorities to fulfill their obligations, prepare reporting on IT issues of relevance to EU institutions for the approval by ESMA and to consult and advise ESMA on IT related issues.