Principles for risk-based supervision: a critical pillar for ESMA’s simplification and burden reduction efforts
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published today its principles for risk-based supervision. These principles support a common and effective EU-wide supervisory culture and strengthen the EU single market.
The principles on risk-based supervision outline key concepts and foundational elements for use by ESMA and National Competent Authorities (NCAs), and provide a structured framework for identifying, assessing, prioritising and addressing risks. They are designed to support a supervisory framework that is consistent, proportionate, and effective across the Union.
A risk-based approach is the cornerstone of EU securities markets supervision, allowing regulators to focus on and address risks that pose the greatest threats to investor protection, financial stability, and orderly markets. Risk-based supervision is also one of ESMA’s flagship projects supporting the simplification and burden reduction agenda, through its contribution to boosting supervisory efficiency and value.
Next steps
ESMA and NCAs will work together to advance the implementation of effective risk-based supervision and foster high quality supervisory outcomes for market participants.
Further information:
Cristina Bonillo
Senior Communications Officer
press@esma.europa.eu