The European Commission launches its Market Integration Package (MIP)

An overview of the Commission’s legislative proposals to facilitate the greater integration of EU financial markets under the SIU.

In December 2025, the European Commission officially launched its “market integration package”, a set of legislative proposals designed to facilitate the greater integration of EU financial markets under the Savings and Investment Union (SIU) strategy.

The package comprises three legislative proposals: proposals for (1) a Master Regulation and (2) a Master Directive which amend several existing pieces of EU financial markets legislation, and (3) a proposal for a Settlement Finality Regulation, which amends the Financial Collateral Directive and repeals the Settlement Finality Directive.

Read on for a high-level overview of the proposals. Click here to access our podcast series on the EU’s market integration package, where our experts discuss the legal, regulatory and strategic implications of these reforms in more detail.

Key legislative proposals

1. The proposed Master Regulation includes amendments to the following:

• The European Securities and Markets Authority (ESMA) Regulation (1095/2010): to transfer direct supervisory power to ESMA for significant market infrastructure entities and crypto-asset service providers, to enhance the use and effectiveness of supervisory convergence tools and collaboration between national competent authorities and ESMA, to give the European Commission separate powers to adopt technical standards even if ESMA does not propose any, to establish a unified framework for the fees paid to ESMA for its supervisory activities and to enhance ESMA’s governance and oversight responsibilities.
• The European Market Infrastructure Regulation (EMIR) (648/2012): to give ESMA direct supervision over significant Central Counterparties (CCPs) and introduce provisions related to that supervisory role (including abolishing the current requirements for colleges of CCP supervisors, other than for “less significant” CCPs).
• The Markets in Financial Instruments Regulation (MIFIR) (600/2014): to transfer supervisory competence for significant trading venues and “Pan-European Market Operators” (PEMOs – which would allow the operation of several trading venues in multiple Member States on the basis of a single licence), and trading venues operated by PEMOs, to ESMA, to introduce requirements into MiFIR that currently sit in MiFID (and thus leave discretion as to the means of implementation which has resulted in divergence), including to create a single harmonised rulebook for trading venues, to clarify rules on cross-border venue access through “trading screens”, ande harmonised rulebook for trading venues, to clarify rules on cross-border venue access through “trading screens”, and also allow for the admission to trading of securities on their venue and the admission of new members from other Member States. Also, CCP access rules for trading venues would be streamlined, and the consolidated tape would include information on the identity of the trading venue offering the best bid and offer price and on the depth of the trading book.
• The Central Securities Depositories Regulation (CSDR) (909/2014): to modernise the provision of CSD services using Distributed Ledger Technology (DLT) and electronic money tokens, give ESMA direct supervisory authority over significant CSDs, further integrate CSDs through CSD “hubs”, and facilitate passporting activity by CSDs by requiring only ex-post notification when a CSD offers its services into another Member State.
• The Distributed Ledger Technology Pilot Regulation (DLTPR) (2022/858): to increase the regime’s flexibility and proportionality, as well as its scale and scope and to address concerns around the durability of the regime by removing the time limits of the permissions granted under the pilot.
• The Markets in Crypto-Asset Regulation (MiCA) (2023/1114): to transfer responsibility for the authorisation, monitoring and supervision of all crypto-asset service providers (CASPs) to ESMA, with other entities already providing some crypto-asset services remaining under national competent authority supervision until such time as crypto-asset activity becomes their main activity.
• The Cross-Border Distribution of Funds Regulation (CBDR) (2019/1156): to remove barriers to the cross-border operations of investment funds (UCITS, AIFMs, EuVECA and EuSEF managers) and clarify their responsibilities when they delegate to third-parties/when third parties distribute on their own behalf, harmonise marketing requirements, improve the passporting regime for UCITS and AIFs and introduce greater ESMA oversight, and increase transparency on regulatory fees charged to UCITS, AIFMs, EuVECA and EuSEF managers by host Member States.

The proposed Master Regulation also includes targeted amendments (in line with the changes proposed to the ESMA regulation aimed at making EU supervision more efficient) to streamline and centralise supervision under the new ESMA “horizontal” supervisory and enforcement framework, for trade repositories, credit rating agencies, benchmark administrators, securitisation repositories, external reviewers for EU Green Bonds and ESG ratings providers, to the following legislation:

• The Central Counterparties Recovery and Resolution Regulation (CCPRRR) (2021/23): to reflect the new supervisory arrangements for CCPs under the related EMIR amendments.
• The Securities Financing Transactions Regulation (SFTR) (2015/2365): to give ESMA central supervision over trade repositories and set rules on the fees to be charged by ESMA to trade repositories under its supervision.
• The Credit Rating Agencies Regulation (CRAR) (1060/2009): to give ESMA central supervision over CRAs and to introduce a new Regulation on the fees charged by ESMA to CRAs.
• The Benchmark Regulation (BMR) (2016/1011): to align the procedural regime for benchmark providers with the new horizontal supervisory framework established under the ESMA Regulation, and amending the provisions relating to fines and ESMA fees.
• The Securitisation Regulation (EUSR) (2017/2402): to give ESMA supervisory powers over Securitisation Repositories.
• The European Green Bond Regulation (EuGB Regulation)(2023/2631): to give ESMA supervisory powers and oversight of external reviewers of EU green bonds.
• The Environmental, Social and Governance (ESG) Rating Regulation (2024/3005): to give ESMA greater supervisory powers and oversight of ESG ratings providers.

2. The proposed Master Directive includes amendments to:

• The Undertakings for Collective Investment in Transferable Securities
  (UCITS) Directive (2009/65) and The Alternative Investment Fund
  Managers Directive (AIFMD) (2011/61):
  The changes would:
  • tackle fragmentation at EU level in the implementation of the UCITS Directive and AIFMD, an Amending Directive would standardise the authorisation and supervision of UCITS and AIFMs through new forms, templates and procedures which ESMA would develop through new technical standards,
  • provide for the recognition of EU groups of UCITS and AIFMs that will operate under new harmonised conduct and prudential rules, allowing national supervisors less discretion to diverge from EU-wide standards and
  • make the application of the management passport more efficient and less burdensome, including through the introduction of a new depositary passport to facilitate depositaries being established in member states other than that of the fund.

For securitisations, an amendment to the UCITS Directive to allow UCITS to invest in 15% of a securitisation (increased from the existing 10% limit on debt securities issued by a single entity, which would include a securitisation) would be a helpful change

• The Markets in Financial Instruments Directive (MiFID) (2014/65): provisions applicable to the operation of trading venues and the authorisation of regulated markets are transferred to MiFIR so as to harmonise the rules applicable to trading venues. However, since investment firms operating an MTF or OTF remain subject to the general authorisation requirements for investment firms under MiFID II, the relevant authorisation provisions for those entities will remain there. In addition, as the proposal further harmonises provisions relating to cross-border activities of trading venues under MiFIR, MIFID II is amended to clarify that those Articles do not apply to the provision of services by an investment firm operating an MTF or OTF through a branch or through the freedom to provide services.

3. The proposed Settlement Finality Regulation would replace the Settlement Finality Directive (SFD) (98/26/EC) with a new Regulation;

Aiming to ensure more harmonised implementation and address national discrepancies in the SFD’s implementation, which include divergence in definitions, the designation of systems, the types of securities that qualify for protection, the precise point at which transfer orders become irrevocable, and the application of conflict-of-law rules which create uncertainty, particularly for multi-jurisdictional transactions.

The key aspects of the legislative proposal for the new SFR include: (i) legal certainty for digital innovation; (ii) conflict-of-law rules; (iii) the participation of EU entities in third-country systems; (iv) the scope of participants; (v) the scope of eligible securities; (vi) designation practices for EU systems (with national competent authorities remaining responsible for designating systems), and ESMA (for clearing and settlement) and the EBA (for payment systems) to develop technical standards for the format and content of applications for designation); (vii) transparency; and (viii) settlement finality moments. Related amendments to the Financial Collateral Directive (FCD) (2002/47/EC) aim to ensure the use of cash, financial instruments, and credit claims issued or recorded on DLT are brought within its scope.

Next steps

The legislative package will be negotiated in the European Council and Parliament. This process will take some time and much can change before texts are finalised and start to apply. The Commission has, however, indicated a “start-up period” for the measures between 2027 and 2029. We will continue to monitor developments as the legislative process progresses.

Please contact us if you would like to discuss any aspect of the market integration package or its implications.