EU Plans SEC-Style ESMA Oversight

The European Commission is preparing a proposal to create an SEC-style central supervisor by expanding the European Securities and Markets Authority (ESMA) to directly oversee stock exchanges, crypto exchanges, crypto-asset service providers and key post-trade infrastructure to help build a Capital Markets Union and make Europe more competitive with the U.S. ESMA would gain broad mandates, including direct supervision of large cross-border firms, the power to issue binding decisions and the final say in disputes between national regulators to reduce fragmentation and lower cross-border costs. ECB President Christine Lagarde and other senior officials back the move as a way to help startups scale across borders. Sources say a draft is reportedly due in December 2025 and the legislative process is likely to extend into 2026. The plan was prompted in part by enforcement gaps — including France’s threat to ban crypto license passporting under MiCA and calls from France, Austria and Italy for ESMA oversight — but exchanges, national regulators and finance hubs such as Luxembourg and Ireland warn it could overcentralize power and harm smaller member states.