The European Securities and Markets Authority (ESMA) has published the final report on its supervisory expectations for management bodies. The paper sets out 12 principles to guide entities under ESMA’s supervision and those looking to obtain an ESMA licence.
In addition to the final report, ESMA has also created a factsheet summarising the 12 principles. The authority states in a press release that the principles aim to “foster the ongoing supervisory dialogue between ESMA and supervised entities in the context of the effectiveness of their governance and oversight”. Entities are expected to use the principles as a framework, but design “individual approaches tailored to their circumstances driven by their nature, scale and complexity”.
The 12 principles indicate that the management body:
• Is responsible for the entity’s strategy, objectives, and overall direction
• Has key oversight over all matters relating to the entity, including delegated responsibilities
• Should be overseen and challenged by members in the supervisory function
• Is responsible for setting the tone from the top
• Should hold regular and effective meetings
• Should receive effective reports that provide a comprehensive, risk-focused view of operations
• Should not prevent or interfere with the direct communication between the management body in its supervisory function and the internal control functions
• Should ensure that a comprehensive, accurate, and impartial internal record is maintained of each meeting
• Should be led effectively by a member
• Has an appropriate number of members and the skills, experience, and knowledge to carry out its duties
• Should regularly review its own effectiveness
• Has a detailed view of the individual and combined skillsets it requires in order to ensure effective oversight of the entity
ESMA’s supervisory teams will integrate the principles into supervisory priorities over the course of 2026.
