Upcoming proposals will suggest expanding the European Securities and Markets Authority’s powers, giving it last say in cases of disputes.
The European Commission is hoping to target its fragmented control of the region’s financial markets, such as stock and crypto exchanges, and clearing houses, with a US Securities and Exchange-styled (SEC) supervisor.
First reported by the Financial Times yesterday (2 November), the move is seen as an effort to bolster the EU’s competitiveness against the US by enabling companies here to access funding and scale up, rather than move over for resources across the Atlantic.
The current regulatory landscape is made up of several national and regional watchdogs overseeing the markets, as well as hundreds of trading and post-trading institutions. An SEC-styled supervisor would come a large way in “completing” the EU’s Capital Markets Union, the Financial Times’ report read. Proposals for a “market integration package” are expected in December.
The upcoming proposals would suggest expanding the existing European Securities and Markets Authority’s (ESMA) powers to include stock exchanges, crypto assets service providers and post-trading infrastructure such as central clearing counterparties and central securities depositories, sources told the publication.
Moreover, the ESMA would also have the last say on disputes between large asset managers, and be able to issue binding decisions in case of disputes between national supervisory authorities.
According to the report, national capitals, such as Luxembourg and Dublin are still mulling over the idea of forking over decision-making powers to the ESMA, which is based out of Paris.
The EU is ramping up efforts to become more conducive to scale-ups wanting to grow in the region. Last week, the Commission launched a multibillion-euro ‘Scaleup Europe Fund’, teaming up with private investors to fund and support companies here. The fund is a part of the Commission’s wider plans to ease regulations and reduce fragmentation across the European single market.
In a conversation with SiliconRepublic.com last year, the former EU commissioner for financial stability, financial services and the capital markets union Mairead McGuinness expressed similar interests, pushing for a single market for capital in the region.
“I think where we’re failing our companies … [is] when they want to scale up, the easiest place usually for them is not in Europe, it’s the US,” she said. “So they tend to pack up their bags and move and we lose the brain power – the potential for more business and jobs.”
Meanwhile, the European Central Bank is moving on to the next phase of the digital euro project, with a possible pilot exercise in mid-2027 and full issuance in 2029.
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