The European Securities and Markets Authority (ESMA) is increasingly being proposed to take on a dual role in both the authorization and direct supervision of various financial entities within the European Union. This proposed expansion aims to centralize regulatory oversight, address disparities in national supervisory practices, and enhance the competitiveness of EU capital markets, potentially aligning with models like the U.S. Securities and Exchange Commission.
Under this proposed framework, ESMA could gain direct supervisory control over key market infrastructures, including crypto-asset service providers (CASPs), trading venues, and central counterparties. Additionally, ESMA already acts as a direct supervisor for entities such as Credit Rating Agencies (CRAs), Trade Repositories (TRs), and certain Data Reporting Service Providers (DRSPs). For other market actors, ESMA shares supervisory responsibilities with National Competent Authorities (NCAs) and conducts supervisory convergence activities to ensure consistent application of financial rules across the EU.