Europe’s push to strengthen its capital markets took centre stage at an FIA forum in Brussels this month, with policymakers and market participants examining the European Commission’s Market Integration and Supervision Package and proposed reforms to the European Securities and Markets Authority’s supervisory powers.
Published on 4 December 2025, the MISP is a wide-ranging legislative package aimed at reducing fragmentation across the EU’s financial markets and strengthening the bloc’s global competitiveness. It forms a central pillar of the European Commission’s broader Savings and Investments Union initiative.
Speaking at the forum, Martin Merlin, director for financial markets at the Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union, noted that a lack of scale remains a key weakness in Europe’s capital markets.
“No individual member state has an economy or financial system large enough to act as a global player on its own,” Merlin said. “Only integrated EU-level markets can deliver the necessary scale.” By contrast with the US, he said, EU markets remain less developed, less liquid and more fragmented, with divergent national regulations and supervisory practices. This has resulted in higher costs for market participants, fewer listings and missed innovation opportunities.
Centralised supervision
The MISP seeks to address those gaps through a combination of targeted market reforms and supervisory centralisation. Among the proposals is a plan to give ESMA direct oversight of “significant” market infrastructures, including major trading venues, central counterparties and central securities depositories, as well as all crypto-asset service providers authorised under the Markets in Crypto-Assets regulation, regardless of their size.
Alongside supervisory reform, the package includes measures aimed at facilitating cross-border market activity and supporting innovation. These include the introduction of an optional single licence that would allow operators to run multiple trading venues across several member states under a single licence, rather than a system of individual national authorisations.
The Commission has also proposed to significantly expand the Distributed Ledger Technology Pilot Regime, raising the activity threshold from €6 billion to €100 billion and broadening the range of eligible financial instruments to encourage large-scale adoption of blockchain technology in trading and post-trade services.
The Commission aims to reach political agreement with the European Parliament and Council this year, with the new rules expected to come into force between 2027 and 2029.
Merlin said the speed with which the package was developed highlights its political importance. The MISP, he noted, was completed in around nine months, far quicker than the two years originally envisaged.
“This package represents one of the most consequential building blocks of the Savings and Investments Union,” he said. “It tackles fragmentation and supervisory barriers that prevent EU capital markets from becoming larger, deeper and more liquid.”
Supervision remains one of the most politically sensitive elements of the package, with some member states supporting a stronger role for ESMA and others expressing concerns about the transfer of supervisory authority away from national regulators.
Merlin acknowledged the debate would be challenging but said the political context had shifted. “There is more realisation at the most senior level that the status quo is not really an option,” he said, pointing to geopolitical pressures and global competition. While compromises are likely, he expressed confidence that progress towards more streamlined, European-level supervision could be achieved, provided reforms deliver genuine efficiency gains rather than additional complexity.
Addressing concerns about ESMA’s capacity to take on expanded responsibilities, Merlin said the proposal envisages a significant increase in staffing, potentially by several hundred roles, alongside new ways of organising supervision with national competent authorities.
“The proposal provides that ESMA will decide how it wants to organise itself, and in relation to the NCAs. Clearly, not everything will be done out of Paris, and member states should understand that their NCAs will continue to play a major role in the overall setup, be it through colleges or joint supervisory teams,” he said.
Ambitious
The proposals were broadly welcomed during a panel discussion following the keynote. Floortje Nagelkerke, a partner at Norton Rose Fulbright, described the Commission’s approach as particularly ambitious. “Ambition is good,” she said, also noting the speed with which the package was introduced after a series of policy reports urging deeper capital markets integration.
From the Commission’s side, Andrea Beltramello, head of unit, Savings and Investments Union, said negotiations with the Council and the European Parliament were still at an early stage. The package affects 19 pieces of financial services legislation, of which 11 involve substantive changes, making it technically complex as well as politically sensitive.
Success, he said, would be measured against three criteria: speed, ambition and integrity. “The world is not waiting for us,” Beltramello said, arguing that the package should be treated as a priority.
“We are not treating this package as business as usual. Yes, we have to take time for the technical discussions, but we have a clear mandate at the highest political level, from the heads of state and government, that we need to make progress on the SIU urgently.”
Beltramello cautioned against unravelling the proposals into isolated components, stressing that their impact depends on being adopted as a coherent whole.
He also highlighted the Commission’s impact assessment as a strong analytical foundation for negotiations and said further technical work could be provided to address any concerns around costs and efficiency.
Clear lines of responsibility
From a supervisory perspective, Nicoletta Giusto, an independent member of ESMA’s CCP Supervisory Committee, said the proposals to centralise supervision were a positive step, though she raised questions about the planned distinction between “significant” and “less significant” CCPs. Given the systemic nature and interconnectedness of clearing, she argued that even medium-sized CCPs can pose material risks.
Giusto also emphasised the importance of clear lines of responsibility between ESMA and national authorities, as well as the need for stronger emergency intervention powers. Recent market stresses, she noted, have shown that lengthy regulatory procedures are not always compatible with effective crisis management.
Despite differing views on the details, the discussions at the Brussels forum reflected a broad consensus that Europe needs to move decisively to strengthen its capital markets. Speakers agreed that as negotiations get underway, the Market Integration and Supervision Package is emerging as a central test of the EU’s ability to translate political ambition into structural reform.
For Merlin, the stakes are clear. “This is about competitiveness, resilience and Europe’s ability to finance its future,” he said. While the path to agreement may be complex, he added, the political momentum behind capital markets integration is stronger than it has been in years.
