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

What Changed

• - ESMA is explicitly positioned as the central supervisory authority for selected capital‑markets activities, with national competent authorities (NCAs) expected to operate within a more formalised ESMA‑centric governance and coordination framework.
• Supervisory objectives are reframed towards risk‑based and adaptive supervision, meaning firms should expect more differentiated supervisory intensity based on risk profile, business model, and cross‑border footprint rather than purely formal licensi
• The paper supports proportionate and transparent funding for ESMA, indicating a future where firms may be subject to EU‑level supervisory levies or fee structures in addition to national regimes, calibrated to size, risk, and cross‑border activity.
• AFM and AMF call for independent, transparent, and accountable EU‑level supervisory governance, foreshadowing changes to ESMA’s decision‑making bodies, oversight processes, and accountability mechanisms that may alter how supervisory decisions and gu
• Data centralisation is identified as a core enabler, implying a stronger move towards EU‑wide data hubs, harmonised reporting formats, and central access for ESMA to transaction, position, and prudential/conduct data currently fragmented across NCAs.
• Effective enforcement is highlighted as a necessary pillar, signalling that ESMA and NCAs will seek clearer allocation of sanctioning powers, more harmonised penalty practices, and cross‑border enforcement cooperation with fewer loopholes for regulat

Suggested Considerations

• Review and update the firm’s supervisory engagement strategy to include structured, proactive engagement with ESMA (not just NCAs), anticipating more direct interactions, thematic reviews, and data requests at EU level.
• Assess current risk‑assessment and risk‑reporting frameworks to ensure they are compatible with a risk‑based and adaptive supervisory approach, including the ability to demonstrate how your firm identifies, measures, and mitigates emerging risks and new business models.
• Conduct a gap analysis of data architecture and regulatory reporting, focusing on data quality, standardisation, and ability to feed into centralised EU data hubs; plan upgrades to systems, controls, and data governance to support ESMA‑level data centralisation.
• Prepare for potential changes in supervisory levies and funding, by modelling the impact of EU‑level ESMA fees in addition to national contributions and incorporating them into medium‑term budgeting and pricing strategies.
• Review governance arrangements, including board oversight, senior management responsibilities, and internal escalation processes, to ensure they can meet higher expectations of independent, transparent, and accountable governance under an ESMA‑centric model.
• Strengthen internal enforcement‑readiness, including documentation, evidence retention, and cross‑border coordination protocols, to respond effectively to potential ESMA‑led investigations and sanctions, in addition to NCA actions.

Key Dates

Who is Affected