ESMA European Securities and Markets Authority

#What ESMA does

The European Securities and Markets Authority, based in Paris, was created in 2011 to build a single rulebook for EU financial markets and to coordinate national regulators. It does not license brokers – that is the job of national authorities – but it shapes the rules they apply.

#Why it matters to retail traders

• Product intervention (2018): ESMA used temporary powers to restrict CFDs and ban binary options for retail clients. The measures – leverage caps, 50% margin close-out, negative balance protection, a ban on incentives and a standardised risk warning – were later made permanent by national regulators. See ESMA leverage limits.
• Registers: ESMA publishes registers of investment firms authorised under MiFID II and an interim register of crypto-asset service providers authorised under MiCA.
• Warnings and statements: ESMA publishes investor warnings (for example on crypto-assets and "finfluencers") and supervisory statements such as its 2023 statement on reverse solicitation.

ESMA also directly supervises a few entities, such as credit rating agencies and trade repositories.