The European Commission has unveiled a major package of reforms designed to fully integrate the EU’s financial markets.
Developed as part of the SIU strategy, the initiative seeks to create a more efficient, competitive, and unified financial system, offering citizens better investment options and helping businesses access funding more easily.
According to the European Commission, the EU’s capital markets remain fragmented and relatively small. In 2024, the market capitalisation of EU stock exchanges was 73% of GDP, compared with 270% in the US.
Divergent national rules and supervisory practices continue to hinder cross-border operations, limiting opportunities for investors and companies and affecting the bloc’s competitiveness.
Maria Luís Albuquerque, commissioner for financial services and the savings and investments union, said: “For too long, Europe has tolerated a level of fragmentation that holds back our economy. Today we are making a deliberate choice to change course.”
She added: “By building a real Single Financial Market, we will give people better opportunities to grow their wealth, and we unlock stronger financing for Europe’s priorities. Market integration is not a technical exercise – it is a political imperative for Europe’s prosperity and global relevance.”
The new package addresses these challenges across four main areas.
The reforms centre on removing cross-border barriers and easing the way firms operate across the EU. It introduces broader passporting for trading venues and CSDs, a new pan-European market operator status to consolidate licenses, and simpler rules for distributing investment funds. It also updates the DLT pilot regulation to give market participants more flexibility and legal certainty.
Supervision will shift further towards ESMA, which will take on direct oversight of major infrastructures including trading venues, CCPs, CSDs, and crypto-asset service providers.
At the same time, the Commission plans to simplify the rulebook by converting directives into regulations and reducing national discretions, cutting complexity and bringing more consistency across member states.
Commenting on the proposals, the European Securities and Markets Association (ESMA), said: “We welcome the European Commission’s legislative proposal on market integration published today. This is a major step towards more efficient, harmonised, and competitive EU capital markets, and reflects many of the recommendations set out in ESMA’s 2024 Position Paper.
“By addressing fragmentation and streamlining supervision, the package will enable more seamless operations and better outcomes for investors and businesses across Europe. We stand ready to take on new responsibilities and look forward to working with the co-legislators to support the drive for deeper market integration.”
The proposals now move to the European Parliament and Council for negotiation and approval. Officials stress that keeping the package intact is essential, as its reforms are designed to work together to deliver a unified market for financial services across the EU.