The European Commission proposes a package of measures to remove barriers within the EU capital market

At a glance

Context

On 4 December 2025, the EC published its Market Integration Package (MIP) which introduces amendments to a broad set of EU financial regulations with the objective of revitalising the European economy and reinforcing its international position. The MIP is one of the key cornerstones of the Savings and investment union (SIU) strategy defined by the EC following the Draghi report.

The SIU’s main objective is to better connect savings among EU citizens to the most productive investments, with a particular focus on the Union’s strategic priorities, such as competitiveness, innovation, green, digital, and defence investments. To meet these objectives, the MIP aims to further facilitate the EU capital markets integration, harmonise supervisory practices, remove barriers to cross-border operations, and foster innovation through new technologies, such as the Distributed Ledger Technology (DLT). Its goal of establishing a genuine single market for capital is pursued by dismantling barriers to market integration and simplifying access for businesses and people across the EU.

The MIP is proposing three documents including:

• Proposal for a regulation regarding the further development of capital market integration and supervision within the Union - Master regulation
• Proposal for a directive regarding the further development of capital market integration and supervision within the Union - Master directive
• Proposal for a Settlement Finality Regulation (SFR)

These proposed amendments affect many of the main EU financial regulatory frameworks, including the:

• Markets in Financial Instruments Regulation (MiFIR)
• European Market Infrastructure Regulation (EMIR)
• Central Securities Depositories Regulation (CSDR)
• Alternative Investment Fund Managers Directive (AIFMD)
• Undertaking for Collective Investment in Transferable Securities (UCITS)
• Markets in Crypto-Assets Regulation (MiCA)
• Securities Financing Transactions Regulation (SFTR)
• Cross-Border Distribution Regulation (CBDR)
• DLT Pilot Regime Regulation
• Credit Rating Agencies Regulation
• Benchmarks Regulation
• Securitisation Regulation
• European Green Bonds Regulation
• ESG Ratings Regulation
   

Key objectives

The EC proposes a series of four changes:

• Comprehensive action towards capital market integration
  The proposal seeks to remove barriers to cross-border financial activity, enabling market actors to operate seamlessly across Member States and fostering competition and scale. This integration is supporting market participants by revising the trading and asset management rulebooks to adjust business operations requirements, including easing conditions for providing cross-border investment services under a single license. This may enable asset management groups to operate more efficiently across borders.
• Regulatory harmonisation
  The initiative addresses fragmentation caused by national discretions in the implementation of EU rules and from divergent supervisory practices. It aims to streamline and harmonise regulatory requirements, reduce administrative burdens, and shift certain provisions from directives to regulations to support more uniform application across the EU and enhance Europe’s competitiveness.
• Regulatory obstacles to the adoption of new technologies
  Regulatory obstacles to the adoption of new technologies, such as distributed ledger technology (DLT) and tokenisation, are targeted for removal. The proposal adapts rules to support DLT-based financial services and ensure legal certainty for innovative business models.
• Supervisory simplification
  This proposal aims to transfer more direct supervisory powers to the European Securities and Markets Authority (ESMA), enhancing supervisory convergence and operational efficiency, particularly for large asset management groups with significant cross-border entities, and fostering greater harmonisation and clarification of regulatory standards across the EU.
   

Major proposed changes

• Expansion of ESMA’s supervisory powers:
  ESMA will gain direct supervisory authority over significant market infrastructures, such as trading venues, central securities depositaries (CSDs), and central clearing counterparties (CCPs), and crypto-asset service providers. ESMA’s role on cross-border distribution of funds will also be reinforced to support supervisory convergence across UCITS and AIFs marketed in the EU.
• Integration of trading, post-trading, and asset management:
  The proposal introduces a pan-European trading venue operator and infrastructures (central counterparties, CSDs, and trading venues), enabling more streamlined passporting and cross-border marketing for investment funds, integrated marketing communications, and strengthened frameworks for crypto-assets and DLT, acknowledging the role of DLT in traditional finance, and expanding activities and thresholds under the DLT Regime.
• One Directive to amend existing AIFMD, UCITS, and MiFID activities:
  At asset management level, the MIP intends to further promote cross-border passporting activities. The management and marketing of UCITS and AIF are currently governed by Directives that allow for national specificities. The MIP proposes a single Directive introducing changes to the existing UCITS, AIFs, and MiFID frameworks to harmonise rules and remove national laws.
   

Impacted stakeholders

• Financial market infrastructures, such as the regulated market, multilateral trading facilities (MTFs), organised trading facilities (OTFs), CCPs, and post trade for central securities depositaries and international central securities depositaries ((I)CSD).
• Financial participants, investment firms, credit institutions, asset managers, and crypto-asset service providers.
• Supervisory authorities, such as ESMA, national competent authorities, and the European Central Bank.
• (Retail) investors and issuers are expected to benefit from greater choice, lower costs, and improved access to capital markets.
   

Next steps

The proposal will proceed through the EU legislative process. Market participants and other stakeholders are expected to review the detailed amendments and assess their potential impact on operations, compliance, and strategic planning.

The consultation phase will run until June 2026. Implementation of the initiative is foreseen in successive phases, with an initial “start‑up” period from mid‑2027 to mid‑2029, followed by full‑scale operation from mid‑2029 onwards.

How Deloitte can engage with you

This package is still at an early stage. Nonetheless, gaining a clear understanding of the potential changes could support your organisation in navigating the evolving environment and adjusting its positioning and strategy accordingly. Our team intends to conduct a comprehensive review of the MIP within the broader context of the SIU framework.

In the meantime, we can support you, providing:

• Awareness assistance: Access tailored training sessions and updates so that your teams are informed about regulatory changes around SIU and market integration.
• Impact assessments: Anticipate and understand how the proposed amendments could affect your business and risk strategies, including internal organisation, cross-border positioning, and innovation aspects.
• Strategic planning: Support the development of strategies to adapt to new supervisory structures and cross-border requirements, while leveraging digital innovation frameworks to build distinctive business models and/or strengthen competitive positioning.
• Cross-border distribution and marketing support: Receive assistance in managing cross-border distribution arrangements and marketing communications in an evolving landscape.

For further information or to discuss how these developments may impact your organisation, please do not hesitate to reach out the Deloitte Luxembourg contacts below.

Disclaimer:
This alert is based solely on the content of the European Commission’s proposal (COM (2025) 943 final, 4 December 2025). No external sources or interpretations have been used.