The European Union's markets watchdog is to significantly expand its payroll to help crack down on investor rip-offs by going "mystery shopping". The European Securities and Markets Authority set out in its three-year strategic plan on Thursday how it will evolve from intense rule-making after the financial crisis to checking that the new regulations are being enforced.

ESMA Chair Steven Maijoor told reporters that staffing at the Paris-based watchdog will rise from 230 at present to around 380 in 2022 as it takes on new responsibilities. It will assess and monitor whether EU investors should be allowed to use foreign clearing houses for securities, a key issue for Britain as it prepares to leave the bloc at the end of January.

ESMA already directly supervises credit rating agencies and bodies that collect data on securities transactions, and will also directly supervise important benchmark market indexes. Maijoor said that ESMA will play a core role in helping the EU deepen its capital market, a pressing challenge given that London, Europe's biggest financial market, will no longer be part of the bloc.

Increasing the number of retail investors in the EU will also be crucial and to help this ESMA will step up inspections to make sure they are getting a good deal from investment funds and other financial services. ESMA will improve the way it crunches data on retail investors to help spot risks better and research mis-selling practices and the costs of financial products.

ESMA said its new coordination role on mystery shopping will provide new insights on misconduct across the union. "We want to make sure that retail investors have a reasonable return on their savings; they should participate more in the capital markets in the EU," Maijoor said.

The array of new powers falls short of the responsibilities the European Commission had wanted to give the watchdog. EU member states decided they did not want their national regulators to lose too much autonomy for now.