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  Title	EU Market Integration Package: 10 key changes
  ID	28943297
  External ID	b32e4422b42a579b9252252b8370d0aa
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  Published Date	Dec. 4, 2025, 4:39 a.m.
  Summary	The European Union's Market Integration Package is the most far-reaching attempt in years to knit together the bloc's capital markets--with implications for savers, companies, market infrastructures…
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  URL	https://delano.lu/article/eu-market-integration-package-10-key-changes
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  Content ID	36558997
  Key	42ebca4f-5d89-452c-849d-8a58b6c72edf
  Content	The European Union's rewrites key parts of the rulebook for trading, post-trading, funds, crypto-assets and supervision. For banks, asset managers and market infrastructures--especially in cross-border hubs such as Luxembourg--it means new supervisory lines, new passporting mechanics and fresh pressure on legacy business models. Here is what is expected to change in practice: 1. ESMA becomes a frontline supervisor The European Securities and Markets Authority (ESMA) stops being mainly a convergence body and becomes a direct supervisor of core European Union market infrastructure. Significant trading venues, Central Counterparties (CCPs), Central Securities Depositories (CSDs) and new Pan-European Market Operators will move to ESMA oversight, alongside all Crypto-Asset Service Providers (CASPs). For the firms concerned, that means a single EU supervisor, one set of procedures and an enforcement culture closer to the banking union than to today's patchwork of national styles. National authorities stay in charge of local market surveillance and non-significant entities, but the centre of gravity for systemically important market infrastructure shifts to Paris. 2. Trading groups get an optional single-licence EU model The big structural change in trading is the introduction of the Pan-European Market Operator (PEMO) status. Groups that currently run several Regulated Markets under separate national authorisations will be able to opt into a single legal entity with one licence and ESMA as supervisor. This is voluntary, but for groups with multiple venues across the Union it opens the door to more aggressive consolidation of governance, technology and risk management. The package also clarifies and strengthens passporting rights and intra-group resource sharing, and it tweaks the forthcoming equity consolidated tape so it can actually be used as a best-execution tool, with deeper data and an explicit flag for the best price. The direction of travel is clear: fewer excuses for fragmented liquidity and multiple, costly memberships. 3. Settlement is pushed into a hub-and-spoke network Under amendments to the Central Securities Depositories Regulation (CSDR), the settlement landscape is steered towards a linked network. Large CSDs serving several Member States or processing a high share of settlement value will be designated as 'hubs' and required to link to each other; smaller CSDs will act as 'spokes' and must connect to at least one hub where they are not already plugged in. All CSDs settling in currencies supported by TARGET2-Securities (T2S) will have to connect and offer T2S settlement. That nudges the system towards a limited number of highly connected settlement nodes and squeezes the value of bespoke bilateral chains. For Luxembourg-domiciled funds using multiple CSDs, the promise is cleaner access to securities issued anywhere in the Union--but also more scrutiny and standardisation of links. 4. Clearing houses face more central supervision The European Market Infrastructure Regulation (EMIR) is amended so ESMA directly supervises 'significant' CCPs, with clear quantitative criteria. Supervisory colleges for other CCPs will be chaired by ESMA, and the authority will play a larger role in approving interoperability arrangements and handling open access requests between CCPs and trading venues. For clearing houses, that means a more unified line into the supervisor and less scope to arbitrage national interpretations of EMIR. For banks and large buy-side users, it should over time yield more consistent margin, model and governance expectations across CCPs, though it also removes some of the flexibility that came from dealing with different national authorities. The regime for third-country CCPs is left broadly unchanged for now. 5. Settlement finality and collateral rules are modernised The long-standing Settlement Finality Directive is turned into a directly applicable Settlement Finality Regulation, with aligned changes to the Financial Collateral Directive. The key protections--that transfer orders and netting remain final even if a participant becomes insolvent, and that collateral is shielded--are preserved but modernised. For system operators and major participants, this matters if they are using newer technologies or cross-border structures. Definitions are updated to be more technology-neutral, conflict-of-law rules are clarified and designation processes are harmonised and centralised through an EU database. That should reduce legal risk around securities collateral and payments in insolvency scenarios, particularly where multiple jurisdictions and DLT-based systems are involved. 6. Fund passports move onto an ESMA data platform For Undertakings for the Collective Investment in Transferable Securities (UCITS) and managers under the Alternative Investment Fund Managers Directive (AIFMD), the real change is operational. Passporting will be hard-wired into the authorisation process: during authorisation, managers declare which Member States they want to market in, and home authorities use standard documentation to notify host authorities via an ESMA-run data platform. That platform becomes the single channel for notifications, updates and de-notifications, with automatic translation. It should cut delays and remove some of the local idiosyncrasies that managers and their Luxembourg hubs have had to navigate. In parallel, a 'depositary passport' breaks the current rule that a fund must appoint a depositary in its home Member State. Any eligible credit institution or investment firm in the Union can act as depositary for UCITS and alternative funds. This alters the competitive map for depositary services: cross-border banking groups can consolidate, and local incumbents in fund domiciles face new entrants. 7. Asset management groups gain cleaner intra-group models The package formally recognises that asset managers operate in integrated groups. Intra-group allocations of functions between UCITS management companies, AIFMs, investment firms and banks in the same EU group will be carved out from the full delegation regime. That allows sharing of compliance, risk and IT functions without treating every internal handover as a third-party outsourcing, as long as the licensed manager is not reduced to a 'letter box'. ESMA does not directly supervise funds or managers, but it gains teeth on convergence. It will run annual joint reviews of large asset management groups with national authorities, looking for divergent supervision, and can push back on national measures that obstruct passporting. In extreme cases it will be able to suspend an entity's cross-border rights. For large cross-border groups, this means group-level scrutiny at EU level in addition to local relationships with supervisors such as Luxembourg's CSSF. 8. CASPs move under a single EU supervisor The Markets in Crypto-Assets Regulation (MiCA) is amended so that all Crypto-Asset Service Providers (CASPs) are authorised and supervised directly by ESMA. There is no split--ESMA becomes the sole supervisor for these entities and also takes over market surveillance and enforcement of market-abuse rules for crypto-assets admitted to trading on crypto-asset platforms. Banks, investment firms, electronic money institutions and fund managers that provide crypto-asset services under existing licences remain under their current supervisors, unless crypto-asset services become their main activity by turnover, in which case supervision of the whole entity (except banks) shifts to ESMA. For crypto platforms and brokers, that means a single EU rule enforcer and less room to play national regimes off against each other. 9. The DLT Pilot is scaled up and made more flexible The Distributed Ledger Technology (DLT) Pilot Regulation is reopened earlier than planned because take-up has been modest. The scope of eligible assets is widened from shares, bonds and UCITS units to all financial instruments; CASPs are allowed in as participants; asset-specific caps are removed and the overall cap per DLT market infrastructure is raised from €6bn to €100bn. A simplified regime is introduced for smaller players handling up to €10bn of DLT instruments, with proportionate requirements. A wider range of regulated entities--investment firms, Regulated Markets, credit institutions, CSDs and CASPs--will be able to provide specific CSD-type services such as DLT notary and central maintenance. Time limits on permissions are dropped, easing the investment case for serious projects. The catch is that thresholds remain, at least for now, to balance innovation and financial stability. For banks and infrastructures experimenting with tokenisation, this is a clear signal that the Commission wants serious scale pilots, but still inside a capped environment. 10. Fees and funding tilt towards EU-level supervision Direct supervision by ESMA will be funded by supervisory fees on the entities it oversees, with principles such as full cost recovery and proportionality applied across sectors. Preparatory build-out costs for ESMA's new roles come from the EU budget. For tasks that are not fee-funded, the funding key changes: national authorities will fund 50% of ESMA's budget for the new tasks and the EU budget 50%, instead of the current 60% and 40% split. For large financial centres, including Luxembourg, that means writing a bigger cheque to a stronger ESMA--in exchange for a more unified supervisory framework that could, over time, lower firms' cost of dealing with 27 different ways of reading the same rules.
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