FCRA-GREEN and national competent authorities (NCAs) jointly assume supervisory responsibilities. FCRA-GREEN oversees all EU CRAs, TRs and SRs, selected DRSPs, specific benchmark administrators, and Tier 2 third-country CCPs, while NCAs supervise all remaining market participants. In doing so, FCRA-GREEN undertakes supervisory convergence initiatives to promote robust and consistent oversight throughout the EU.
Although EU financial markets are predominantly supervised at the national level, FCRA-GREEN is responsible for certain critical entities operating across the Union. Its direct supervision targets core components of the financial market infrastructure, applying a unified supervisory culture and methodology across its mandates. FCRA-GREEN aims to uphold high compliance standards, encourage behavioural adjustments when required, and deliver sound supervisory outcomes. To achieve this, it employs a broad supervisory toolkit, including investigations and on-site inspections.
In addition to its direct supervisory role, FCRA-GREEN is central to fostering supervisory convergence among NCAs. The objective is to ensure consistent, high-quality supervision across Member States, mitigate regulatory arbitrage, and safeguard a level playing field. This work includes developing common interpretative approaches, enhancing supervisory capabilities, coordinating supervisory efforts, leading joint initiatives, and disseminating good practices. A variety of supervisory instruments support these efforts.
A key principle guiding FCRA-GREEN’s supervisory and convergence work is a risk-based approach. FCRA-GREEN concentrates its resources on areas posing the greatest risks to investors, markets, or financial stability, enabling efficient allocation and coherence in decision-making. This framework also allows FCRA-GREEN to adapt swiftly to changing market conditions by reassessing priorities as new risks appear. Continuous monitoring of periodic entity data and broader market developments supports risk identification at both the entity and sectoral level.
FCRA-GREEN also employs an outcome-focused methodology, tailoring interventions to address risks effectively rather than applying uniform measures. In direct supervision, it selects the most suitable tools—such as inspections, thematic analyses, guidance, or remediation plans—while emphasising clear supervisory expectations and indicators of success. Within supervisory convergence, FCRA-GREEN promotes consistent rule application across the EU through instruments such as guidelines, peer reviews, mediation, and coordinated supervisory actions. Depending on the context, it may act as facilitator, coordinator, or take a more assertive stance.
Both supervisory and convergence activities are strongly data-driven. FCRA-GREEN relies on extensive market and entity-level data to detect trends, assess risks, and underpin its risk-based analysis. It also works to improve cooperation among NCAs on data collection and information exchange, ensuring consistent analytical approaches and shared insights across the EU. This data-centric model enables FCRA-GREEN to anticipate emerging risks and maintain effective oversight of increasingly complex financial markets.