Introduction

2025 will mark a fresh start in the EU as the new European Commission (Commission), which has been in place since 1 December 2024, will begin its work. Although the new Commission’s work programme for 2025 will not be published until 11 February 2025, there are a number of new initiatives within the remit of financial services that the Commission has announced. Furthermore, 2025 will see the progression of a number of existing initiatives that have previously been under discussion in the European Parliament and the Council.

The remainder of this article provides a high-level overview of some of the more critical future and ongoing financial services-related initiatives for 2025.

  1. New initiatives
    • Review of Sustainable Finance Disclosure Regulation (SFDR): The Commission held a public consultation in Q1 2023 to review the overall SFDR framework for the first time since its application. Since its inception, in-scope firms and stakeholders have raised a number of issues on the legal certainty and usability of the framework. One aspect that has repeatedly come up has been the greenwashing risks that disclosures pose due to the lack of a clear and easy-to-understand product classification system. In addition, the interlinkage between the SFDR and other EU frameworks, such as the EU sustainable finance taxonomy, is considered to be unclear on a number of aspects. The Commission is expected to publish a legislative proposal to review the SFDR framework in Spring 2025.
    • Review of the Securitisation Regulation: Between October and December 2024 the Commission held a targeted consultation on the effectiveness of the EU securitisation framework, which has applied since 2019. The aim of the framework was to promote an EU securitisation market that creates a right balance between providing opportunity for the markets and retaining financial stability. However, the Commission concluded in the targeted consultation that the EU’s securitisation market has continued to decline since the 2008-2009 global financial crisis. A March 2024 Eurogroup statement, followed by similar statements by the European Council in April and June 2024, called for the relaunch of the EU securitisation framework through regulatory and prudential changes. These calls were in line with the Enrico Letta and Mario Draghi reports, that argued that by revitalising the EU securitisation market would strengthen the lending capacity of banks, creating deeper capital markets and increase the EU’s competitiveness. The Commission is expected to publish a legislative proposal to review the securitisation framework in Spring 2025.
    • Non-bank financial intermediation: In May 2024, the Commission published a targeted consultation on macroprudential policies for non-bank financial intermediation (NBFI). The Commission is considering policy action on this topic considering the growing importance of NBFI and the possible macroprudential risks that this may bring. Among other things, the consultation looks at the possible repurposing or review of existing macroprudential and reporting tools and the possible introduction of new macroprudential tools. Following the closing of the consultation on 22 November 2024, the Commission may issue a legislative proposal on this issue sometime in 2025.
    • Simplification of reporting frameworks: The Commission is planning to publish a proposal for an Omnibus Directive amending the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive and the EU Taxonomy Regulation. The proposal’s aim would be to ensure that the three frameworks are interoperable. In addition, and in line with criticism from the industry, the Commission intends to use the proposal to simplify the regime and reduce the administrative burden on businesses. The legislative proposal is expected on 26 February 2025.
    • T+1 settlement:  In November 2024, the European Securities and Markets Authority (ESMA) published its final report on shortening the securities settlement cycle to T+1. The report followed ESMA’s 2023 Call for Evidence and a Joint Statement of ESMA, the Commission and the European Central Bank on shortening the standard securities settlement cycle. The final report reconfirmed ESMA’s support for a transition from T+2 to T+1 securities settlement. ESMA also recommended 11 October 2027 as the ideal transition date. The EU’s proposed move to T+1 follows the recent T+1 transitions in the U.S. and India, and similar initiatives in Switzerland and the UK. We understand that the Commission intends to publish a legislative proposal to make the necessary changes to the Central Securities Depositories Regulation in March 2025.

  2. Ongoing legislative and regulatory procedures
    • The Payment Services Package: Issued last Summer, this legislative package includes a new proposed Directive, PSD3, which amends the existing Payment Services Directive 2 (PSD2) and a proposed Regulation, the Payment Services Regulation (PSR). The Council negotiations on a common position on PSD3 and PSR remain ongoing and are expected to continue in Q1 2025. The European Parliament already adopted its position on these two proposals. In addition, the package includes a proposed Regulation on a Framework for Financial Data Access (FIDAR). As both the Council and the European Parliament have adopted their respective positions on FIDAR, the negotiations on this file will go into trilogue phase in the beginning of 2025, whereby the Commission and the co-legislators will negotiate a compromise text. As the European Parliament and Council positions are considerably different, we expect trilogue negotiations to continue throughout the first half of 2025.
    • Benchmarks Regulation (BMR) review: Just before the end of 2024, the Commission, European Parliament and the Council reached a trilogue compromise on the review of the BMR. The BMR framework will be amended by, among other things, limiting its scope of application to significant and critical benchmarks, EU Paris-aligned benchmarks, EU Climate Transition benchmarks, and certain commodity benchmarks. Other amendments will be made with regard to the use of third-country benchmarks in the EU, and certain reporting requirements. Following the trilogue compromise, the final text will need to be formally adopted in the European Parliament and Council before it can be published in the EU Official Journal. The amendments to the BMR framework are expected to apply from 1 January 2026.
    • Retail investment strategy (RIS): The Commission published its RIS legislative package in May 2023 with the aim of empowering retail investors to take more informed investment decisions that would better correspond to their investment needs and objectives. Among other things, the package would make amendments to the relevant frameworks on inducements, investment firm localisation and aims to introduce value for money benchmarks. In January 2025, the RIS package remains in trilogue phase. Considering the level of contentiousness in the trilogue negotiations on the level of ambition of the RIS, negotiations are expected to continue throughout the six-month Polish Council Presidency, which ends on 30 June 2025.
    • Crisis management and deposit insurance (CMDI): The Commission published the CMDI legislative package, which amends the Bank Recovery and Resolution Directive, the Single Resolution Mechanism Regulation and the Deposit Guarantee Schemes Directive, in April 2023. The main aim of the proposed amendments is to address certain deficiencies that have been identified following a review of the framework and to improve the effectiveness of the resolution and deposit protection regimes for EU banks. Among other things, medium-sized banks will become in scope of resolution if they are deemed critical to financial stability in a regional market. Following a first trilogue in mid-December 2024, trilogues are expected to continue throughout the Polish Council Presidency.
    • MiFID II / MiFIR implementation: ESMA and the Commission will be undertaking work on the development and adoption of regulatory standards detailing new and updated regulatory frameworks. This work includes amendments to the level 2 measures under the Markets in Financial Instruments Regulation on post-trade transparency, and the detailed rules on the consolidated tape providers (CTPs), as well as the selection of these CTPs. On 3 January 2025, ESMA launched the selection procedure for a bonds CTP, and intends to decide on its selection by July. In June 2025, ESMA will commence the selection procedure for an equities CTP.
    • EMIR review implementation: Following the entry into force of EMIR 3 on 24 December 2024, ESMA and the Commission will undertake work on the adoption of technical standards under the EMIR framework. This will include the adoption of rules detailing the new EMIR active account requirement, on which ESMA is consulting until 27 January 2025.