The Effects of the ESMA’s Powers on Domestic Contract Law

Abstract

The establishment of the European Securities and Markets Authority (ESMA) is one of the most important innovations introduced by the European Union (EU) after the global financial crisis. Whereas a considerable amount of literature has investigated the impact of the ESMA’s powers on regulatory convergence, supervision, and public enforcement, little attention has been paid to the effects that the ESMA’s powers could exert on national contract law and the private enforcement of EU financial regulation. The main hypothesis of this study is that, although ESMA does not have the power of creating, suspending, or terminating contractual obligations, some of its acts (e.g. product’s restrictions, guidelines, recommendations) may become an important tool for the parties to design their contractual obligations and for national courts and alternative dispute resolution mechanism to enforce national contract law. Starting from the analysis of the ESMA’s objectives, tasks and powers this chapter explores the intersections between the ESMA’s (quasi) regulatory and supervisory powers and national contract law and it argues that the ESMA’s powers will enhance the uniform interpretation and enforcement of contract law across national jurisdictions.