The financial supervision package, the regulation that establishes new European Supervisory Authorities (ESAs) including the European Securities and Markets Authority (ESMA), has been signed into law by Jerzy Buzek, president of the European Parliament, and Olivier Chastel, Belgium's state secretary for European Affairs. This was the final stage in the process for the legislation, initially proposed on 23 September 2010.
ESMA is set to become operational by 1 January 2011, replacing the Committee of European Securities Regulators (CESR). CESR is responsible for coordinating activities between national securities market regulators and oversight of the implementation of European legislation in member states but does not have the power to issue guidelines and recommendations. ESMA will be responsible for the development and application of technical standards and will have the ability to intervene in disputes between national regulators.
In crisis situations it will also have the authority to impose rules on national markets as if it were a national regulator. If the European Commission (EC) follows technical advice provided to it by CESR as part of its MiFID review, then this could give further power to ESMA under MiFID II, planned for publication by the EC in Q2 2011.
Buzek said, “This legislative package is one of the key cornerstones in rebuilding economic growth in the EU. The new and strengthened financial supervisory authorities will help to ensure that we avoid deep financial crises in the future. It is now essential to make fast progress towards a strong economic governance model for the eurozone which is needed to effectively respond to market tensions.”