The European Commission has launched a fresh initiative aimed at strengthening the integration of financial markets across the European Union. On April 15, 2025, a targeted consultation was unveiled, inviting banks, financial firms, and other market participants to offer their insights and suggestions. The Cyprus Securities and Exchange Commission (CySEC) is actively encouraging stakeholders to participate in this important dialogue.
This consultation is a key step under the broader Savings and Investments Union (SIU) strategy, which was first introduced on March 19, 2025. Its main goal is to pinpoint the existing barriers that hinder the seamless operation of EU-wide financial markets.
Main Areas of Focus: Streamlining Regulations and Boosting Market Efficiency
The consultation document is structured around several critical areas. The first area centers on simplifying the regulatory environment and cutting down administrative burdens, particularly in trading, post-trading, and asset management sectors. By streamlining rules, the European Commission hopes to make market operations more efficient and accessible.
Next, the second area zeroes in on trading activities. Stakeholders are asked to share views on ways to consolidate liquidity across trading venues, improve market infrastructure accessibility, and enhance the quality of trade execution for investors.
The third area covers post-trade services. Here, the Commission is gathering examples of cross-border settlement issues, challenges posed by emerging technologies, and inefficiencies caused by unharmonized market practices.
CySEC Calls for Industry Feedback on Supervision and Barriers
The fourth part of the consultation seeks feedback on horizontal barriers across trading and post-trading infrastructures. This includes exploring issues highlighted in the 2017 European Post-Trade Forum report, operational synergies, financial instrument issuance, and innovations such as Distributed Ledger Technology (DLT) and asset tokenisation.
Another section, focused on asset management and funds, aims to identify difficulties that asset managers and investment funds face when trying to operate across the EU single market. It questions whether current authorisation and passporting systems are effective and asks for ideas on how to make them more efficient and streamlined.
Possible Shift Toward Centralised Supervision and Strengthened ESA Roles
A major proposal being explored is the potential centralisation of supervisory duties. The Commission is contemplating moving the oversight of critical financial entities such as central counterparties, securities depositories, trading venues, asset managers, and crypto service providers under the umbrella of European Supervisory Authorities (ESAs).
Finally, the consultation touches on the governance and funding of ESAs, which include the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the Anti-Money Laundering Authority (AMLA). It invites comments on how these bodies are currently governed and funded, and whether new tools are needed to boost supervisory convergence and efficiency across the EU.
