The European Securities and Markets Authority published a follow-up to its 2022 peer review on supervision of investment firms’ cross-border activities, finding that the review has led to clear improvements by national competent authorities in the Netherlands, Germany, the Czech Republic, Luxembourg, Cyprus and Malta. ESMA said supervision has strengthened across the cycle, particularly through tighter authorisation scrutiny of firms’ cross-border plans, wider use of data and risk indicators to monitor cross-border business, and more targeted supervisory action, enforcement and cooperation between authorities. The report links that progress to a market that continues to expand in scale and complexity. In 2024, 370 firms across the European Economic Area provided cross-border investment services to about 10.5 million retail clients, while the six jurisdictions under review accounted for 220 firms and more than 6 million clients. ESMA nonetheless said some gaps remain. It highlighted the need for supervisory and enforcement approaches to keep pace where outbound cross-border activity is particularly significant, pointing in particular to Germany and Cyprus. The report also identified more specific follow-up points, including further systematising the Netherlands' authorisation and supervisory approach to cross-border risks, scaling up intrusive supervisory work and keeping enforcement commensurate with risk in Germany, and continuing to improve timeliness of cooperation and stronger action against repeat infringements in Cyprus. ESMA said all national competent authorities, especially those with rapidly growing outbound cross-border activity, should reflect on the report’s conclusions. It will continue to focus on supervisory convergence, cooperation among national supervisors and data-driven, risk-based supervision as retail cross-border investment services expand.
European Securities and Markets Authority2026-07-20
European Securities and Markets Authority follow-up report finds stronger supervision of cross-border investment services, urges further action for high-volume jurisdictions
The European Securities and Markets Authority’s follow-up report on six national supervisors found that its 2022 peer review has improved supervision of cross-border investment services, especially in authorisations, data-led risk monitoring and cooperation. It also said supervisory and enforcement approaches still need to be strengthened where outbound cross-border business is large or growing, particularly in Germany and Cyprus. ESMA will keep focusing on supervisory convergence and risk-based cross-border oversight.