Working towards increased supervisory convergence is beneficial to both EU supervisors and financial market participants. A tool available to achieve this is the delegation of tasks and responsibilities from one National Competent Authority (NCA) to another or to ESMA.
The purpose of such a delegation is to reduce the duplication of supervisory tasks, foster cooperation, streamline the supervisory process, as well as reduce the burden imposed on financial market participants.
When can such a delegation take place?
Article 28 of the ESMA Regulation allows an NCA to delegate tasks and responsibilities under the legal acts within ESMA’s remit to another NCA or to ESMA, provided that the following conditions are met:
- the delegate authority gives its consent;
- where responsibilities are delegated, the delegation results in the reallocation of competences between the delegating and the delegate authorities;
- any enforcement, administrative or judicial procedure relating to the delegated responsibilities, if any, is governed by the national law of the delegate authority;
- any potential arrangements set out by Member States concerning the delegation of responsibilities by NCAs are complied with; and,
- in case of delegation of tasks and responsibilities between NCAs, ESMA is informed of the proposed delegation agreement at least one month before the agreement is entered into.
What is ESMA’s role?
After being informed of a proposed delegation agreement as indicated in point (v) above, ESMA has the option to issue an opinion thereon within one month (calculated in accordance with Regulation (EEC, Euratom) No 1182/71) pursuant to Article 28(4) of the ESMA Regulation.
Once concluded, delegation agreements are published on ESMA’s website in order to ensure that all parties concerned are informed appropriately.