ESMA (European regulator)

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    ESMAThe European Securities and Markets Authority (ESMA) is an independent financial regulator responsible for regulating financial markets across the European Union (EU).

    As a watchdog, ESMA ensures that EU-wide regulatory legislation for financial markets, such as MiFID, is upheld across member states.

    ESMA also regulates credit rating agencies across member states to ensure they operate transparently and avoid potential conflicts of interest when assessing the creditworthiness of financial instruments, exchange-listed companies and countries. Rating companies such as Fitch, Standard and Poor’s and Moody’s all fall within this remit.

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    The underlying point of these two functions is firstly to boost protection for investors by ensuring they are treated consistently across the EU and secondly to oversee the stability of the various financial markets within the EU, by regulating function, transparency, cost-effectiveness, competition and integrity through a single regulatory rule book.

    As an EU body, it reports to the European Parliament through committee meetings and publishes an annual report. It is also fully accountable to the European Commission and Council of the EU.

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