ESMA and the December 2025 package proposal

ESMA was established by Regulation 1095/2010 of 24 November 2010. At that time, it had no direct supervisory powers over financial intermediaries. However, this situation did not remain unchanged. It was granted such powers, for instance, in 2011 regarding credit rating agencies (Regulation 1060/2009 of 16 September 2009, amended by Regulation 513/2011 of 11 May 2011), in 2012 regarding trade repositories (Regulation 648/2012 of 4 July 2012) and in 2024 regarding ESG rating providers (Regulation 2024/3005 of 27 November 2024). Other examples could be given to illustrate ESMA’s role as a supervisor. However, with the December 2025 package, ESMA’s role as a supervisor takes on a new dimension. ESMA is officially becoming a supervisor because of the amendments to the Regulation of 24 November 2010. And the number of intermediaries it will supervise is increasing significantly.

An officially recognised supervisor

Until now, when ESMA was granted supervisory powers over a financial intermediary, the text governing it was amended to give ESMA this power: the Regulation of 24 November 2010 was not amended. Proposal 943 [Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) n°1095/2010, n°648/2012, n°600/2014, n°909/2014, 2015/2365, 2019/1156, 2021/23, 2022/858, 2023/1114, n°1060/2009, 2016/1011, 2017/2402, 2023/2631 and 2024/3005 as regards the further development of capital market integration and supervision within the Union, Brussels, 4.12.2025, COM(2025) 943 final, 2025/0383 (COD)] amends it in order to formalise the supervisory function, modify the organisation of the Authority and introduce a common basis governing it.

The formalisation of this function will result in the amendment of Article 1 of the 2010 Regulation. The provision to be introduced will clearly state that ESMA ‘shall exercise powers over certain financial market participants in accordance with this Regulation and other Union acts’. It will specify that ‘those powers shall include, where conferred by this Regulation and other Union acts, registration, authorisation, recognition, ongoing supervision, investigations, including the power to conduct on-site inspections,’ and the power to sanction those entities (Art. 1, 3b, ESMA Regulation, derived from Art. 1, 1), proposal 943).

In 2019, there were plans to change the structure of ESMA to establish a new body composed of members who were independent of national authorities, but this reform did not come to fruition. The idea has been taken up again in proposal 943, which provides for the replacement of the Management Board by an Executive Board composed of persons with no connection to these authorities (Art. 6(2), ESMA Regulation as drafted in Art. 1(4), proposal 943).

A common framework for the supervisory function must be introduced into the Regulation of 24 November 2010. This will be the subject of the new Chapter IIa entitled ‘Powers of the authority in relation to financial market participants under the supervision of the authority’ (Art. 1, 27), proposal 943). This includes the usual provisions relating to supervision: ‘scope’ (Art. 39a), ‘requests for information’ (Art. 39b), “investigations” (Art. 39c), “on-site inspections ‘ (Art. 39d), ’procedural rules applicable to supervisory measures and fines‘ (Art. 39e), “fines” (Art. 39f), periodic penalty payments’ (Art. 39g), “supervisory measures ‘ (Art. 39h), ’administrative sanctions and measures against natural persons‘ (Art. 39j), ’hearing of persons concerned‘ (Art. 39j), ’disclosure, nature, enforcement and allocation of fines and periodic penalty payments ‘ (Art. 39k), “settlement” (Art. 39l), ’review by the Court of Justice of the European Union‘ (Art. 39m) and ’supervision costs” (Art. 39n).

New professionals directly supervised

Currently, certain financial intermediaries are supervised by national authorities. If the package is adopted, this supervision will be transferred to ESMA. In some cases, supervision is direct, as is the case for crypto-asset service providers, with proposal 943 amending the MICA Regulation (Regulation 2023/114 of 31 May 2023) to this effect. In other cases, a distinction is made between significant professionals and others, with the former being supervised directly by ESMA: this is the case for central securities depositories governed by Regulation 909/2014 of 23 July 2014, known as the CSD Regulation, and amended for this purpose by proposal 943. In other cases, a new category of professionals supervised by ESMA is created, as is the case for pan-European operators who designate professionals managing trading platforms in several European countries (Regulation 600/2014 of 15 May 2014).

This innovation is not without consequences. Euronext, which manages several markets in several countries, falls into this category. This group will now be supervised by ESMA and not, for its French components, by the AMF.

ESMA and ECB, the pillars of the European federal Europe

The European federal Europe is being built. It is based on two unions: the banking union and the savings and investment union. The European Central Bank has been the pillar of the former since it was given direct supervision of credit institutions in 2013, with effect from November 2014. ESMA will be the pillar of the second. This movement is leading to a reduction in the importance of national authorities. The latter may not complain about this, as supervision has a cost that is no longer their problem if they are not responsible for supervision. At the same time, their role is becoming more subordinate, even if it should not be neglected.