At Börsen-Zeitung's Finanzplatztag on Tuesday, Verena Ross, Chair of the European Securities and Markets Authority (ESMA), focused her speech on the urgent challenges and the need for reform of European capital markets. She emphasised the need for more uniform supervision, the reduction of market fragmentation, and greater consideration of investor interests.

Ross also spoke in favour of expanding ESMA's competencies, particularly in areas involving cross-border financial services. Centralised, uniform supervision could help to avoid regulatory arbitrage and ensure consistent market surveillance.

„The possibility of direct supervision at EU level of the financial market should be examined – especially where companies operate across borders or where there is a risk of regulatory arbitrage,“ said Ross.

But she also warned against additional hurdles, saying that "we must resist the temptation to add new layers of complexity.“ Instead, the aim should be to achieve more efficient regulation that relieves the burden on market participants without sacrificing the necessary controls.

The fragmentation and the large number of trading centres, central depositories and counterparties lead to inefficiencies and hinder the free flow of capital within the EU. „The European financial market landscape continues to suffer from over-complexity," she noted.

According to Ross, hardly any progress has been made on cross-border capital markets integration in recent years. This not only represents an obstacle to investment and corporate financing, but could also lead to Europe losing importance as a financial centre. Frankfurt, currently positioned as the EU's leading finance hub, can only maintain its position in the long term if it is embedded in closer European cooperation.

Another important concern of ESMA is investor protection, especially for small investors. The capital markets must become more accessible, and easier to understand, so that consumers can make informed decisions. „At ESMA, we want to put investors more at the centre of the markets and provide them with appropriate support in their journey on the capital markets," said Ross.

She spoke in favour of user-friendly digital solutions as well as transparent and understandable financial products. One concrete example is the idea of a comparison platform: „A tangible improvement for investors could be a comparison tool that makes it easier for them to find their way around the various product options across borders.“ ESMA will carry out an in-depth analysis of fees, costs and performance of financial products by the end of the year in order to uncover possible shortcomings in transparency.