French regulator calls for reform to ESMA

The AMF has made several suggestions to improve the governance and central role of the EU financial watchdog.

The Autorité des Marchés Financiers (AMF) has called for reforms to the governance and central role of the European financial markets regulator, in response to a consultation.

The AMF put forward three ways to strengthen the decision-making process at the European Securities and Markets Authority (ESMA), including reforms to the appointment of a chairperson.

There should also be an extension of qualified-majority voting for all-important decisions on the ESMA board of directors and authority for permanent members to sit on the management board alongside representatives of national authorities that sit on a rotating basis.

The AMF added it supports a reform to the financing of ESMA through greater involvement of the industry, based on a breakdown of size of the financial industry of each EU member state.

In terms of ESMA’s central role, the AMF said it should focus on certain areas, including collection and reliability of data submitted by markets under MiFID II and the assessment process and monitoring of regulation of countries outside of the EU.

Direct supervision of critical benchmark administrators and of central counterparties should also be a central role of ESMA, the AMF added.

Last week the European Commission proposed changes to the supervision of central counterparties within the EU, which could see ESMA granted authority to relocate those considered systemically important.

In some instances and in agreement with the relevant central bank, ESMA would have the authority to request the CCP only be able to provide services in the Union if it establishes itself in the EU.