The Investment Company Institute (ICI) welcomed the European Commission’s proposal to advance the integration and growth of Europe’s capital markets. In response, ICI Chief Global Affairs Officer, Tracey Wingate, issued the following statement:

“The Commission’s Market Integration and Supervision Package is a concrete step toward building the deeper capital markets Europe needs. A strong and competitive asset management industry is essential to this effort.

“The proposal reflects several ICI recommendations to improve the UCITS framework, including through harmonising the UCITS and AIFMD marketing provisions. A more consistent regulatory architecture is essential to removing gold-plating and enabling cross-border activity in a true single market.

“Despite this regulatory progress, the deeper forms of fragmentation constraining the industry stem from national rules and market differences, not legislative gaps. Supervision of large cross-border asset managers is a critical question and transferring national responsibilities to ESMA does not solve the underlying causes of this fragmentation. Neither is the status quo an option.

“Rather, Europe needs a credible and effective mechanism that advances supervisory convergence: one that can deliver more consistent supervisory outcomes while preserving the essential link between national supervisors and the markets they oversee. We look forward to working with the Council and Parliament towards this goal.

“Europe has an opportunity to build capital markets that are deeper, more dynamic, and more globally competitive. Realising the promise of the SIU will depend on sustained commitment to reducing fragmentation, improving supervisory coherence, and enabling Europe’s asset management industry to thrive in support of long-term economic growth.”

Source: ICI

ESMA welcomes Commission’s ambitious proposal on market integration 

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, welcomes the European Commission’s legislative proposal on market integration and supervision published today. The package represents a major step towards deeper and more efficient EU capital markets and reflects many of the recommendations set out in ESMA’s 2024 Position Paper on building more effective and attractive capital markets in the EU.

The proposal directly addresses fragmentation stemming from divergent national rules and supervisory practices. By removing barriers in trading, post-trading and asset management, and by enabling more harmonised supervision, the package will help market participants operate more seamlessly across the Single Market and support scale, efficiency and better outcomes for investors and businesses. We also welcome the strong focus on streamlining regulatory requirements, reducing administrative burden, and facilitating innovation.  All of this will enhance the competitiveness and agility of EU capital markets.

A key element of the package is the proposed transfer of direct supervision of certain significant cross-border infrastructures and crypto-asset service providers to the EU level. ESMA stands ready to take on these specific responsibilities, drawing on almost 15 years of growing experience supervising diverse and selective parts of our capital markets.

This proposal represents a shift in supervision for a limited subset of our capital markets, in which ESMA would work hand in hand with the National Competent Authorities (NCAs) to develop the capacity and expertise to take on such new responsibilities. At the same time, for the broader market that remains under national supervision, coordinating supervisory standards and achieving aligned outcomes across the EU remains a key priority. This would be reinforced for example by giving ESMA an enhanced convergence role for large cross-border asset management groups.

The proposal forms a central pillar of the Commission’s Savings and Investments Union (SIU) strategy. ESMA looks forward to working with the co-legislators as they advance this important initiative to build deeper and more integrated EU capital markets.

Source: ESMA