Fight over ESMA continues in the EU

With thanks to Felix Shipkevich and the team at CFTCLaw.com – It seems as if a (somewhat predictable) debate is brewing between the European parliament, and individual EU member countries, regarding how much power pan-EU finanical markets overseer ESMA will actually have.

And it seems as if the current impasse revolves around ESMA’s plans to move the majority of derivatives transactions out of the opaque “over-the-counter” market on to regulated, transparent exchanges.

As we reported back in December, it must be remembered that ESMA (European Securities and Markets Authority), like its predecessor CESR (the Committee of European Securities Regulators), is not a regulator itself – each EU / EEA country has its own national securities regulator, such as the FSA in the UK and CySEC in Cyprus. However ESMA, which came into being at the beginning of 2011, was meant to have more powers that its somewhat toothless predecessor CESR, which was basically only able to consult to national regulators. ESMA has powers which include drafting technical standards that are legally binding in EU member states. Essentially, ESMA cannot force national regulators to adopt certain regulations, but it can make formal suggestions which – if not adopted – can put a national regulator in an uncomfortable position.

For more on this topic click here to see CFTCLaw.com’s complete article.

For more information on Forex regulation globally see the LeapRate-Dow Jones Forex Industry Report.

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