European Securities and Markets Authority (ESMA)

Why in News?

The RBI has signed a Memorandum of Understanding (MoU) with the ESMA to facilitate formal recognition of Indian Central Counterparties (CCPs), including the Clearing Corporation of India Ltd. (CCIL).

• It is the European Union’s financial markets regulator and supervisor.
• ESMA protects the investor and promotes stable, orderly financial markets.
• Established – 2011.
• Headquarters – Paris, France.
• Nature – Independent EU Authority.
• Members - The members include National authorities responsible for securities markets in 27 EU countries.
• Objectives – Investor Protection – To help financial consumers make informed choices.
• Orderly Markets – To ensure integrity, transparency, efficiency, and proper functioning of financial markets and infrastructures.
• Financial Stability – To strengthen the financial system to withstand shocks and financial imbalances.
• Key Focus Area – Sustainable Finance – Integrates Environmental, Social, and Governance (ESG) factors to support sustainability and climate transition.
• Technology & Data – Promotes innovation, data-driven supervision, and functions as a pan-European data hub.
• Role & Functions – Fosters supervisory convergence among national competent authorities (NCAs) of EU member states.
• Works closely with other European Supervisory Authorities
  • European Banking Authority (EBA)
  • European Insurance and Occupational Pensions Authority (EIOPA)
• Global cooperation – Cooperates with international bodies such as the International Organisation of Securities Commissions (IOSCO) and the Financial Stability Board (FSB).
• Accountability – Accountable to European Institutions such as
  • European Parliament.
  • Council of the European Union.
  • European Commission.
• Reports regularly through formal hearings and Annual Reports.

References

1. PIB | European Securities and Markets Authority (ESMA)
2. ESMA | About