COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the documents Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE amending Regulations (EU) No 1095/2010, No 648/2012, No 600/2014, No 909/2014, 2015/2365, 2019/1156, 2021/23, 2022/858, 2023/1114, No 1060/2009, 2016/1011, 2017/2402, 2023/2631 and 2024/3005 as regards the further development of capital market integration and supervision within the Union Proposal for DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2009/65/EC, 2011/61/EU and 2014/65/EU as regards the further development of capital market integration and supervision within the Union Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on settlement finality and repealing Directive 98/26/EC and amending Directive 2002/47/EC on financial collateral arrangements
Date: 2025-12-04
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: European Securities and Markets Authority, capital markets union, financial control, financial legislation, financial market, financial services, financial solvency, investment, investment company, single market

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   EUROPEAN COMMISSION  Brussels, 4.12.2025  SWD(2025) 944 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT    Accompanying the documents   Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE amending Regulations (EU) No 1095/2010, No 648/2012, No 600/2014, No 909/2014, 2015/2365, 2019/1156, 2021/23, 2022/858, 2023/1114, No 1060/2009, 2016/1011, 2017/2402, 2023/2631 and 2024/3005 as regards the further development of capital market integration and supervision within the Union      Proposal for DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2009/65/EC, 2011/61/EU and 2014/65/EU as regards the further development of capital market integration and supervision within the Union      Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on settlement finality and repealing Directive 98/26/EC and amending Directive 2002/47/EC on financial collateral arrangements {COM(2025) 941 final} - {COM(2025) 942 final} - {COM(2025) 943 final} - {SEC(2025) 943 final} - {SWD(2025) 943 final}  
 
 
Need for action 

EU  capital  markets  remain  under-developed  compared  to  other  major  economies  and 
fragmented  along  national  lines.  In  her  State  of  the  Union  address,  Commission  President 
Ursula  von  der  Leyen  highlighted  finance  as  a  critical  area  where  persistent  barriers  are 
holding back progress towards the Single Market. In this regard, she emphasized the need to 
build a Savings and Investments Union (SIU).   

This initiative focuses on two core pillars of the Commission’s SIU strategy: ‘integration and 
scale’,  and  ‘efficient  supervision  in  the  single  market’.  It  has  a  very  broad  scope  and 
encompasses  key  sectors  that  are  the  backbone  of  capital  markets,  the  trading,  post-trading 
and asset management sectors. They provide essential infrastructure for offering and investing 
in  financial instruments  and assets, and enable crucial intermediation  between investors and 
entities  seeking  financing.  The  initiative  covers  also  innovation,  in  particular  distributed 
ledger technologies. 

Currently, effective solutions to ensure cross-border provision of services in these sectors are 
either absent or hindered by varying national rules implementing EU legal acts. Non-aligned 
supervisory  practices  and  weak  supervisory  convergence  tools  and  powers  at  EU  level 
exacerbate  these  issues.  These  barriers  to  the  cross-border  provision  of  services  hinder  the 
establishment  of  a  genuine  Single  Market  for  capital.  They  lead  to  market  inefficiencies, 
limited economies of scale, reduced liquidity in capital markets, increased costs for investors, 
restricted access to a broader investor base across borders, and higher cost of capital for EU 
companies, ultimately undermining the productivity and competitiveness of the EU economy. 
Moreover, EU rules need updating to better facilitate financial services provision using new 
technologies, in particular distributed ledged technologies (DLT), which can further enhance 
capital market efficiency. 

What is this initiative expected to achieve?  
This initiative aims to address these barriers. This will improve the functioning of EU capital 
markets  for  the  benefit  of  investors,  businesses  and  the  wider  EU  economy  and  facilitate 
investors’  access  to  a  wide  range  of  investment  opportunities  while  enabling  companies  to 
raise capital across borders. 

In particular, it aims at:  

1.  Enabling  further  market  integration  and  scale  effects  by  improving  the  ability  of 
market actors in those sectors to operate more seamlessly across Member States. As a 
result, cross-border transactions are expected to increase and become cheaper.            

2.  Enabling  integrated  supervision  by  tackling  inconsistencies  and  complexities  arising 
from fragmented national supervisory approaches. Integrated supervision is crucial to 
promote  market  integration,  and  this  initiative  aims  to  make  supervision  more 
effective, more conducive to cross-border activities, and more responsive to emerging 
risks, while reducing unnecessary burdens on firms.  

3.  Facilitate innovation and in particular the take up of digital-ledger technologies. This 
would stimulate competition in the area of trading and post-trading services, leading to 
improved market outcomes. 

Action  at  EU  level  is  required  to  remove  those  barriers,  enhance  market  integration  and 
facilitate  market  integration.  Action  at  national  level  alone  cannot  resolve  these  challenges 
because  they  would  not  deliver  the  necessary  convergence  of  regulatory  and  supervisory 

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standards  and  market  practices  given  the  diversity  of  Member  States’  legal  frameworks, 
supervisory traditions and market structures.  

Possible solutions 

Beyond the option of no EU action, two packages of policy options were identified based on a 
call for evidence, a targeted consultation, stakeholder engagements, a study on fragmentation 
in  EU  trading  and  post-trading  infrastructures,  a  study  on  barriers  to,  and  drivers  of,  the 
scaling-up  of  funds  investing  in  innovative  and  growth  companies  in  the  EU,  literature 
reviews,  and  previous  initiatives  documenting  the  most  significant  remaining  outstanding 
barriers to EU capital market integration.  

Option 1 is the baseline option of no policy action. Option 2 involves a broad review of the 
trading,  post-trading  and  asset  management  rulebooks  to  harmonise  and  streamline 
requirements for business operations, including easing some requirements within groups and 
for services provided on a cross-border basis, under a single license. In the post-trading area, 
interconnectedness  between  central  securities  depositories  (CSDs)  would  also  be  improved. 
Option  2  would  also  include  amendments  to  post-trade  legislation  —to  make  it  more 
technologically neutral— as well as to the DLT pilot regime (DLTPR) to expand its scope and 
scale.  Investment  funds  would  gain  immediate  and  full  single  market  access  upon 
authorisation to their chosen Member States, thereby reducing time and costs associated with 
the current notification regimes, and asset management groups would be able to operate more 
efficiently  in  the  single  market  by  utilising  and  sharing  resources  across  EU  entities  of  the 
same  group  without  being  subject  to  stringent  delegation  requirements.  On  supervision, 
Option  2 aims to  strengthen the use and effectiveness  of supervisory  convergence tools and 
powers,  focusing  on  the  European  Securities  and  Markets  Authorities  (ESMA)  and  its 
governance. This option also involves transferring supervisory powers to ESMA for the most 
significant  infrastructures  (central  counterparties,  CSDs  and  trading  venues)  and  for  all  the 
crypto-asset  service  providers  (CASPs),  and  to  have  ESMA  coordinating  the  supervision  of 
large asset managers and investment funds.   

Option 3 builds on Option 2 but is more far-reaching with additional elements to establish an 
integrated  market,  such  as,  for  instance,  mandatory  connection  between  significant  trading 
venues,  mandating  links  between  CSDs,  creating  group-level  authorisation  for  asset 
managers, full flexibility in the DLTPR, ESMA direct supervision of all infrastructures, asset 
managers and CASPs.   

The  analysis  assesses  the  options  in  relation  to  three  objectives:  (i)  enabling  further  market 
integration and scale effects by increasing cross-border activity; (ii) improving supervision by 
reducing fragmentation; and (iii) facilitating innovation by removing regulatory obstacles. It 
shows that the potential benefits associated with the additional actions in Option 3 would not 
outweigh the incremental costs. Option 3 is also less coherent with other EU policy initiatives 
and may have unintended competition and financial stability consequences.  

Other  options,  such  as  fully  converting  all  Directives  in  the  trading,  post-trading  and  asset 
management  sectors  into  Regulations,  or  mandating  bi-directional  links  between  all  CSDs, 
were discarded due to excessive cost, complexity or legal concerns. The option of improving 
supervisory convergence while keeping supervision at national level was also discarded as it 
would not address the problems identified.  

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Impacts of the preferred option  

The  assessment  concludes  that  Option  2  is  the  preferred  policy  package  as  it  delivers 
significant  integration  benefits  while  remaining  proportionate  in  terms  of  costs  and 
subsidiarity.  It  combines  extensive  harmonisation  of  requirements  in  the  relevant  trading, 
post-trading  and  asset  management  frameworks  and  removal  of  barriers  to  cross-border 
activities, with stronger supervisory convergence tools and powers and EU-level supervision 
of the most significant infrastructures. These aspects reinforce each other. The harmonisation 
of  rules  in  this  package  would  facilitate  the  transfer  of  supervision  of  some  operators  and 
markets  to  the  EU  level  and,  in  the  case  of  CASPs,  for  all  entities,  and  allow  better 
enforcement of the single rulebook.  

The  measures  under  this  option  would  ease  regulatory  burdens  and  operational  complexity, 
thereby improving the  efficiency of providing services across borders and fostering market-
integration.  Implementation  costs  would  fall  mainly  on  infrastructures  and  national 
authorities.  This  option  would  also  require  significant  resources  and  infrastructure 
development  at  ESMA,  the  majority  of  it  would  be  fee  funded.  But  all  these  costs  are 
expected  to  be  outweighed  by  efficiency  gains  and  simplification  in  the  medium  term.  The 
initiative would reduce legal uncertainty for issuers and investors, lower compliance costs and 
improve predictability. Increased flexibility in the DLT-pilot regime and changes in sectoral 
legislation  would  encourage  greater  uptake  of  this  technology.  Stronger  supervisory 
convergence and a more integrated supervisory framework would level the playing field, limit 
regulatory arbitrage and reduce the administrative burden related to cross-border activities.   

The initiative will facilitate investors’ access to a wide range of investment opportunities and 
enable companies to raise capital across borders. It will therefore contribute to  improve how 
we mobilise capital in Europe and allow the right financing ecosystem to emerge in order to 
support EU strategic priorities and make our economy stronger, more competitive. 

Although  not  specifically  targeted  at  SMEs,  the  initiative  could  also  bring  about  positive 
impacts for SMEs. Similar to larger firms, smaller market participants in the financial sector 
will  benefit  from  reduced  costs  and  administrative  burden  for  cross-border  provision  of 
services. Given lower volumes and revenue base, these cost savings can be more impactful for 
SMEs. While less efficient SMEs could be pushed out of the market due to increased cross-
border competition, SMEs with viable business models will be able to grow more easily.  

Ex-post  evaluation  of  all  new  legislative  measures  is  a  priority  for  the  Commission.  The 
Commission  services  will  review  the  outputs,  results  and  impacts  of  this  initiative  once  the 
legal  instrument  has  entered  into  force.  After  five  years,  the  Commission  will  carry  out  the 
evaluation  of  the  amendments  contained  in  this  proposal,  in  line  with  the  Commission’s 
Better Regulation Guidelines.     

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