Brussels eyes ‘pooling’ EU-level supervision of crypto, stock exchanges, asset managers
The move is likely to be fiercely resisted by industry groups and many member states, including Luxembourg, Ireland, and Belgium
The European Commission is seeking to boost EU-level supervision of key financial actors, including stock exchanges, crypto firms and major asset managers, according to a draft Commission proposal seen by Euractiv.
The move comes amid a long-standing debate over the need to consolidate financial oversight at the European Securities and Markets Authority (ESMA), the EU’s financial markets watchdog.
The Commission and France argue that central supervision is necessary to create a fully-fledged “capital markets union”, which Brussels estimates could boost private investment by up to €470 billion per year. That is half of the EU’s annual investment needs identified by former European Central Bank chief Mario Draghi, another strong supporter of central supervision.
However, the idea is strongly opposed by many smaller EU countries, including Luxembourg, Ireland, and Belgium, which view the push as an unwarranted ploy by Paris to gain oversight over their own financial sectors. ESMA is based in the French capital.
“More efficient and harmonised supervision is essential to integrate EU capital markets,” the draft Commission proposal states, adding that its initiative aims to give ESMA stronger powers to ensure common rules are applied evenly across the bloc.
“For certain significant and cross-border entities in trading and post-trading, and for new areas like crypto-asset service providers, pooling supervision at EU level” can help integrate markets and make them work more efficiently, the draft notes.
Meanwhile, “for large asset managers’ groups and investment funds”, EU-level oversight “will remove barriers and increase cross-border activities”, it adds.
In addition to member state opposition, the Commission’s proposal is likely to be fiercely resisted by EFAMA, the European asset managers’ association.
In a statement released last month, the group reiterated “its long-standing opposition to EU centralised supervision of asset managers”, arguing that the current national-based system works best for the industry.
The Commission, however, argues in the draft proposal that “harmonising and streamlining” the EU’s financial rulebook would address the patchwork of national rules that currently cause delays and inconsistencies.
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