France's financial markets regulator is pushing for substantial changes to European capital market supervision, arguing that the current fragmented system undermines investor protection and limits the competitiveness of EU financial markets.
France Pushes for "Unified" European Capital Market Supervision
The Autorité des Marchés Financiers (AMF) published its response to the European Commission's consultation on the Savings and Investments Union, advocating for an enhanced role for the European Securities and Markets Authority (ESMA) in overseeing cross-border financial activities.
The French regulator highlighted significant gaps in the current supervisory framework, where mechanisms remain largely national despite progress toward market integration. This creates what the AMF describes as differences in regulatory application, supervisory weaknesses, and additional costs for market participants.
"The fragmentation of financial market supervision in Europe is a major obstacle to deepening the integration of European capital markets," the AMF stated in its consultation response.
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ESMA Would Gain Direct Oversight Powers
Under the AMF's proposal, ESMA would assume direct supervision of large, cross-border entities including pan-European market infrastructures, global crypto-asset service providers, and major asset management groups.
The French regulator recently collaborated with Austrian and Italian authorities to call for urgent ESMA supervision of major crypto-asset service providers, following recommendations from an ESMA report published in spring 2024.
Smaller entities operating primarily in national markets would continue under national authority jurisdiction through a delegation arrangement organized by ESMA using an indirect supervision model.
Currently, each country operates rather independently and fights financial market problems on its own. For example, the AMF alone closed 181 fraudulent investment sites in 2024, and local fraud victims lost an average of 30 thousand euros each.
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Governance Restructure Proposed for ESMA
The AMF outlined specific governance changes for ESMA to accommodate expanded supervisory responsibilities. The proposal includes creating a board of supervisors comprising the 27 chairs of national competent authorities, responsible for regulatory consistency.
A smaller executive committee made up of qualified independent individuals would handle operational supervisory decisions under this structure.
"It's time to resolutely embark on this essential change in order to develop the European capital markets," said AMF Chair Marie-Anne Barbat-Layani. "Only unified, consistent and robust supervision will enable the European Union to consolidate financial stability, effectively simplify the regulatory framework while ensuring better protection for investors, and build a single market for financial services that lives up to its ambitions".
Market Transformation Drives Reform Push
The AMF emphasized that profound market transformation and the growing importance of private finance and crypto-assets make more integrated capital market supervision essential. The regulator argued that current implementation divergences need to end, drawing parallels to the banking sector's single supervisory mechanism.
In connection with the above, the AMF together with regulators from Italy and Austria also proposed changes to the latest MiCA cryptocurrency regulations regarding EU crypto oversight, so that platforms from outside the union would be better controlled
The proposal comes as the European Commission pursues its Savings and Investments Union strategy, which aims to create better financial opportunities for EU citizens while enhancing the financial system's capability to connect savings with productive investments.
The Commission estimates that Europe needs an additional €750-800 billion per year by 2030 to address challenges including climate change, technological shifts, and geopolitical dynamics.
