From design to delivery: the AFM and the AMF identify five enablers for effective EU-level market supervision

MISP: an opportunity to strengthen European capital markets

European capital markets are on the verge of a major transformation. Recent policy initiatives, including the Draghi and Letta reports, have highlighted the need for deeper market integration to better support the funding of the European Union’s strategic objectives. The European Commission’s Market Integration and Supervision Package responds to this ambition by strengthening the role of the European Securities and Markets Authority (ESMA).

Building an effective supervisory framework with ESMA at its centre

For the AFM and the AMF, the debate is no longer whether supervision should be centralised in certain areas, but how centralisation can be implemented in a successful and cost-effective manner. Centralised supervision seeks to deliver consistent outcomes across the EU, to remove duplicative compliance burdens for cross-border firms, and to allow supervisory resources to be deployed where they have the greatest impact. In that respect, effective supervision should be risk-based, adaptive and proportionate. Supervisors must also be able to respond to innovation, emerging risks and new business models. An effective supervisory governance should rely on a robust framework for cooperation and coordination between ESMA and national competent authorities, with ESMA as the decision maker.

Five enablers for successful centralisation

The five key enablers supporting the successful implementation of a centralised supervision are:

1) risk-based and adaptive supervision
2) proportionate and transparent funding
3) independent, transparent and accountable governance
4) data centralisation, and
5) effective enforcement.

Together these enablers will help ensure that centralisation delivers its intended benefits and strengthens European capital markets while maintaining the trust of market participants and society. More in afm-amf-from-design-to-delivery-position-paper.

Laura van Geest, Chair of the Executive board of the AFM and the AMF’s Chair, Marie-Anne Barbat-Layani, declared: 'The MISP is a unique opportunity to strengthen European capital markets and enhance supervisory effectiveness across the EU. By ensuring that the right conditions are in place, we can build a centralised supervisory framework that is nimble and capable of meeting the needs of increasingly integrated European markets.'

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