On 15 April 2025, the European Commission (Commission) launched a targeted consultation on the integration of European Union (EU) capital markets. The aim of the consultation is to collect feedback on obstacles to financial market integration across the EU and it is part of the Savings and Investments Union (SIU) strategy. The Commission is looking for feedback from a wide range of stakeholders.

The Commission consultation covers a broad range of topics and issues. The need and appetite for more harmonised rules across the EU and the necessity to reduce regulatory barriers to the cross-border provision of financial services are overarching themes of the consultation. The possible benefit of more centralised supervision is one of the topics that reoccurs throughout the consultation as well, which has been a highly controversial issue among the Member States and the industry alike.

In terms of content, the consultation is divided into seven distinct sections. These are:

  1. Simplification and burden reduction

This section looks for views on simplification and burden reduction of the EU regulatory framework in the trade, post-trade and asset management and funds sectors. Among other things, the Commission asks whether there is a need for greater proportionality in the financial services regulatory framework. Through a serious of detailed questions about the current market structure, it also asks respondents to identify barriers that should be addressed within the Markets in Financial Instruments Directive (MiFID II) and Alternative Investment Fund Managers Directive (AIFMD) frameworks. Respondents are also asked to list any other policy areas that would in their view benefit from simplification, especially seen in the light in the interplay between different EU regulatory frameworks. Finally, the Commission asks for views on whether more EU level supervision could contribute to simplification and burden reduction for firms.

  1. Trade

The second section is dedicated to trading issues and contains a large number of questions. It looks for views on the nature of barriers to integration, modernisation and digitalisation of liquidity pools, as well as barriers to cross-border operations and regulatory and non-regulatory barriers to liquidity aggregation and deepening. Some of the issues that the Commission seeks stakeholders’ views on include prospective measures to improve consolidation of liquidity across trading venues through better interconnections and access to trading venues, including by retail investors. It also discusses issues relating to access to market infrastructure and quality of execution. The final topic the Commission asks for views on in this section is the impact of recent trends on EU liquidity. Among other things, respondents are asked about their opinions on dark trading for equity instruments, 24-hour trading, the role of multilateral as opposed to bilateral trading, single market maker venues, and ghost liquidity.

  1. Post-trading

Post-trading is the main topic of the third section of the consultation paper. The Commission identified three main issues it would like to receive stakeholder views on, being (1) barriers to cross-border settlement; (2) barriers to the application of new technology and new market practices; and (3) unharmonised and inefficient market practices and application of law, as well as disproportionate compliance costs. More concretely, the first section addresses the cross-border provision of central security depository (CSD) services and the freedom of issuance, links between EU CSDs, settlement services in the EU, legal certainty, the Settlement Finality Directive (SFD), and new technology and new market practices. On this last topic, the Commission seeks feedback on the applicability of the Central Securities Depositories Regulation (CSDR) and the SFD to distributed ledger technology (DLT)-based CSDs. Finally, the section on post-trading considers CSDR-related compliance costs, information sharing and authorisation procedures.

  1. Horizontal barriers to trading and post-trading infrastructures

Following two sections on vertical topics, this section addresses horizontal barriers to trading and post-trading infrastructures in four main areas. These areas include the 2017 European Post Trade Forum Report (EPTF), cross-border operational synergies between entities, issuance, and innovation. On the EPTF, the Commission asks respondents to assess the continuing importance of the barriers identified by the EPTF report. The Commission also asks for views on the current regulatory set-up for the supervision of outsourcing and the treatment of group structures. It also seeks views on the functioning of the DLT Pilot Regime and on the issue of asset tokenisation, including whether prudential treatment of credit institutions’ exposures to tokenised assets should differentiate between permissioned and permissionless DLTs.

  1. Asset management and funds

With this section, the Commission aims to identify obstacles experienced by EU funds and asset managers to accessing the single market. In addition, it looks to gather stakeholder insights on barriers and experiences in managing cross-border investment funds, to explore the effectiveness of existing authorisation and passport systems, and to explore possibilities for simplifying current requirements.

  1. Supervision

The final two sections of the consultation dive deeper into the supervisory framework.  Whereas the first part discusses the current framework in general, the second part goes deeper into the supervision framework of specific sectors, such as central counterparties, CSDs, trading venues, asset managers and crypto-asset service providers. The final section addresses the governance framework for new direct supervisory mandates, supervisory convergence, data and funding. The Commission asks respondents to indicate which parts of the trading framework would benefit from more harmonised or direct EU-level supervision, and considers various criteria that could prospectively be used for the purpose of identification of entities that would be subject to such more integrated EU supervision.  The prospective introduction of integrated EU supervision has been a contentious topic of discussion over the past year. Whereas some Member States are in favour of moving supervisory tasks from the national to the EU level, at least for certain financial institutions, others are opposing the idea. Views amongst the industry are also divided. That said, the SIU Communication published on 19 March 2025 shows that the Commission is still looking at more unified supervision of capital markets, including by transferring certain tasks to the EU level. It will be interesting to see how this debate evolves over the coming months.

Next steps

Responses to the consultation should be made through an online questionnaire, which will be published on the consultation webpage on 22 April 2025. The deadline for feedback is 10 June 2025. The Commission is expected to use the responses received to the consultation to direct its overall policy approach towards the further development of its capital markets regulatory framework, the contours of which were presented in the SIU Communication.