ESMA final report on supervisory expectations for the management body

The European Securities Markets Authority (ESMA) has published its final report on supervisory expectations for the management body of firms directly supervised by ESMA. The management body is defined as being the body or bodies legally appointed and empowered to set the strategy, objectives and overall direction of that firm, and which oversee and monitor decision-making and include those who effectively direct the firm's business. The concept of management body is taken to include a supervisory function and a management function.

The report sets out 12 high-level principles to guide governance and oversight arrangements for entities under its direct supervision and those seeking for ESMA registration and authorisation, including credit rating agencies, benchmark administrators of EU critical benchmarks and third-country recognised benchmarks, third-country Tier 2 (i.e., systemically important) central counterparties, data reporting service providers, securitisation repositories and trade repositories.

The principles follow the prescriptive draft consulted on in July 2024 and aim to provide outcome-based guidance, allowing proportional application based on an entity's nature, scale and complexity. While the expectations are not legally binding, ESMA states they serve as best practice benchmarks for supervisory dialogue. ESMA will consider the supervisory expectations for the purpose of its supervision three months following publication of the final report, being 10 March 2026. The report is accompanied by a fact sheet.

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