This Regulation establishes a Single Supervisory Mechanism (SSM) by conferring specific prudential‑supervisory tasks on the European Central Bank (ECB) for credit institutions in participating Member States. The ECB has exclusive competence for core functions such as authorisation and withdrawal, consolidated supervision, assessment of acquisitions of qualifying holdings, supervisory reviews, early intervention and co‑ordination with the EBA, ESRB and national competent authorities. Non‑euro Member States may enter into close cooperation; supervisory costs are to be met by fees on supervised entities and transitional arrangements apply with substantive start‑up measures.

The ECB is vested with investigatory and on‑site powers, the ability to impose administrative penalties and to remove managers, subject to due‑process safeguards. Organisational safeguards include strict separation from monetary policy, a Supervisory Board (with a Chair and Vice‑Chair appointed via the Council and Parliament), an Administrative Board of Review for internal remedies and judicial review before the CJEU; professional secrecy and accountability to the European Parliament and national parliaments are required.