The Dutch Authority for the Financial Markets and the French Financial Markets Authority have published a joint paper backing the European Commission's package on capital market integration and supervisory centralization and setting out five conditions they view as necessary for effective centralized supervision at European Union level. The paper argues that the debate is no longer whether some areas of supervision should be centralized, but how to design centralization so it is effective and cost-efficient, with the European Securities and Markets Authority as the central supervisor. The two authorities say centralized supervision should deliver consistent outcomes across the European Union, avoid duplicate supervisory and compliance burdens for cross-border firms, and direct supervisory resources to the areas of greatest impact. They identify five enabling conditions: risk-based and adaptive supervision, a proportionate and transparent cost model, independent transparent and accountable governance, data centralization, and effective enforcement. They also say the architecture should remain proportionate and responsive to innovation, emerging risks and new business models, supported by a robust framework for cooperation and coordination between ESMA and national competent authorities, with ESMA in the decision-making role.

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