The European Commission’s proposed Market Integration and Supervision Package (MISP) is designed to remove key barriers to capital market integration. It aims to strengthen the role of the European Securities and Markets Authority (ESMA), introduce and improve European passports, foster innovation (DLT, tokenisation) and simplify regulations.
In December 2025, the European Commission presented a series of three legislative texts:
- A proposal to amend the UCITS, AIFMD and MiFID Directives
- A simplification or ‘Omnibus’ package amending numerous texts (including CSDR, MiCAR etc.), as well as the regulation establishing ESMA
- A proposal for a regulation to replace the Settlement Finality Directive
MISP is part of the European Commission’s Savings and Investments Union (SIU) strategy, advocated for by the recent Draghi and Letta reports. The Commission's objective, which is shared by the co-legislators (the Council and the Parliament), is to create a more integrated, efficient, and competitive financial system by removing certain intra-European barriers.
The proposed measures are broad in scope, requiring amendments to multiple directives and regulations so this article cannot present them in full. For a comprehensive picture, see the Commission's MISP publication.
As far as the financial markets are concerned, the entire infrastructure ecosystem (exchanges, clearing houses, and central securities depositories) would be affected, particularly when the most significant entities are brought under ESMA’s supervision, and by changes to the rules and obligations governing interoperability.
MISP introduces many initiatives as regards asset management, including streamlined cross-border fund distribution within the EU, with harmonised communications, regulatory fees and charges, and augmented supervisory powers for ESMA. Also of note is the introduction of the concept of an “EU Group” asset managers that would see intra-EU group allocation of resources no longer treated as delegation. The AIFM and UCITS Directives would also be reviewed to introduce the concept of a European depositary passport. On this point, the industry is almost unanimous in considering the initiative premature and potentially a source of risk and confusion for investors. The presence of a proposal to strengthen ESMA's coordinating role for the asset management sector is, in this respect, a confirmation that European harmonisation in this area remains incomplete.
While the overarching objectives are widely shared, stakeholder comments, to which CACEIS has of course contributed, show that many clarifications are awaited, particularly regarding the division of responsibilities between ESMA and national regulators, the risk of additional costs from the supervisory framework, and remaining diverging approaches.
The package also aims to promote innovation and remove regulatory barriers for Distributed Ledger Technology (DLT) and the tokenisation of financial instruments. It amends the DLT Pilot Regime Regulation to remove and amend certain restrictive limits on the total market value of all DLT financial instruments and on DLT infrastructure licences. Crypto-asset service providers (CASPs), provided that these services constitute their principal activity, would now be supervised by ESMA.
The initiative is part of the Commission's simplification programme. As such, it proposes to transform certain directives into regulations, to better frame Level 2 empowerments (which are deemed too numerous), and, with regard to ESMA, to increase supervisory convergence tools, to create a duty of cooperation between the European Authority and national authorities, to strengthen its conflict resolution powers, and to extend the scope of "no-action letters" to account for difficulties in applying certain regulations. Thus, in parallel with the strengthening of certain Commission powers, ESMA's mandate, governance, and resources would be profoundly altered. The Commission considers that the anticipated increase in supervisory costs may be offset, in the medium term, by efficiency gains and greater simplification.
The examination of the MISP package is clearly considered a priority by the co-legislators. However, the diversity of the topics addressed and the initial differences of opinion, particularly concerning the future balance of powers between ESMA and the national regulatory bodies, make the objective of defining a general approach at the Council level by the summer of 2026 particularly ambitious.
The European Parliament, for its part, is beginning its examination of the texts and expects to organise a plenary vote before summer break. Should this calendar be confirmed, a clarification of the points under discussion should come in before 2027.
