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ESMA was formerly CESR.


About ESMA

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. In particular, ESMA fosters supervisory convergence both amongst securities regulators, and across financial sectors by working closely with the other European Supervisory Authorities competent in the field of banking (EBA), and insurance and occupational pensions (EIOPA).

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.

Finally, ESMA also contributes to the financial stability of the European Union, in the short, medium and long-term, through its contribution to the work of the European Systemic Risk Board, which identifies potential risks to the financial system and provides advice to diminish possible threats to the financial stability of the Union. 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.

Carlos Tavares elected Vice-Chairman, Board of Supervisors elects Members of Management Board and endorses internal rules and procedures] ESMA, January 11, 2011

New head of ESMA selected

The European Securities and Markets Authority (ESMA) announces today the selection of Steven Maijoor, as the proposed first chair of ESMA. This follows a vote by ESMA’s Board of Supervisors. Before taking up his duties, the selected chairperson will be heard by the European Parliament who has up to one month to object to his designation. The Chairperson represents ESMA, and is responsible for preparing the work of the Board of Supervisors and chairs the meetings of the Board of Supervisors and the Management Board.

The full-time chair of ESMA will serve for a term of five years, based at ESMA’s headquarters in Paris. Steven Maijoor (46) is currently a director at the Netherlands Authority for the Financial Markets (AFM) where he is in charge of financial reporting, auditing issues, market integrity supervision and part of the business operations. Maijoor entered the service of the AFM in April 2004. Maijoor has also represented the AFM in various European and international fora, lately chairing the International Forum of Independent Audit Regulators (IFIAR). He is a part-time professor at both the Maastricht University and the VU University Amsterdam conducting research on issues such as reporting, audit and governance. From 2001 to 2004, Maijoor was Dean of the School of Business & Economics at Maastricht University.

How ESMA works

The Committee of Wise Men, chaired by Baron Alexandre Lamfalussy, outlined in its report of 15 February 2001 several shortcomings in the legislative system for securities and proposed a four level approach as well as the creation of CESR, ESMA's predecessor which was given a role as a technical advisory committee. The creation of ESMA as an EU Authority on 1 January 2011 through the ESMA Regulation, has resulted in some changes regarding how the four level legislative procedure and these are described below.

Level 1 Directives and regulations, continue to 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 and these are identified in the diagram below.

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. The Commission will also be able to follow its usual procedures for referring a case against the Member State to the Court of Justice.

ESMA's consultation practices

ESMA, its standing committees and networks work in an open and transparent manner, and will consult extensively, and at an early stage, with market participants, consumers and end-users. In addition, a Securities and Markets Stakeholder Group will be established to advise ESMA on working priorities and assess developments in the Single Market in the field of Financial Services.


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