At the end of each month, the SAFE Regulatory Radar highlights a selection of important news and developments on financial regulation at the national and EU level.
Sustainable Finance: Stop-the-Clock directive
On 14 April, 2025, the Council of the EU adopted the "Stop-the-Clock" directive, the first measure from the Commission’s February 2025 "Omnibus I" simplification package. This directive delays the application and transposition dates of selected sustainability reporting and due diligence requirements. The Corporate Sustainability Reporting Directive (CSRD) application will be delayed by two years for large companies that have not yet begun reporting and for listed small and medium-sized enterprises (SMEs). Additionally, the transposition deadline and the initial application phase of the Corporate Sustainability Due Diligence Directive (CSDDD) are postponed by one year. The directive requires member states to transpose CSRD and CSDDD provisions into law by 31 December 2025 and 26 July 2027, respectively. As CSRD and CSDDD are subject to change, also as a consequence of the ‘Omnibus I’ package, deferring imminent deadlines allows EU legislators to agree on the revisions.
The "Stop-the-Clock" directive is shaped in the context of the Commission’s commitment to reduce reporting burdens, enhance competitiveness, and maintain the objectives of the European Green Deal and the Sustainable Finance Action Plan with utmost priority. The directive shall enter into force on the day after it is published in the Official Journal of the European Union.
On 9 April 2025, the European Securities and Markets Authority (ESMA) released the final report on the Common Supervisory Action (CSA) on ESG disclosures under the Benchmark Regulation (BMR). The BMR governs the provision, contribution to, and use of benchmarks in financial instruments and contracts. The report offers several key recommendations: Firstly, it suggests that the European Commission consider amending the BMR Level 2 measures to ease the regulatory burden on benchmark administrators. Secondly, it advises them to improve the transparency and comparability of ESG information, making it more useful for benchmark users.
Additionally, the report examines the broader context of sustainable finance regulations. It stresses the importance of ensuring that ESG disclosure requirements are consistent and compatible with the various legislations governing sustainable finance.
Refining the EU’s Securitization Framework: Evaluation and supervisory insights
On 31 March 2025, the Joint Committee of the European Supervisory Authorities (EBA, EIOPA, and ESMA) published its report on the implementation and functioning of the Securitization Regulation. The report offers several recommendations to enhance the effectiveness of Europe’s securitization framework. It aims to simplify the regulatory landscape while maintaining robust investor protection and financial stability. To this end, it identifies key areas for improvement to foster the development of strong and reliable securitization markets in the EU.
First, the key recommendations include clarifying the scope of the Securitization Regulation to ensure it applies when at least one party—on either the sell-side or buy-side—is based in the EU.
The proposal suggests expanding the definition of public securitization to include transactions where:
- Securities are issued with a prospectus approved under the EU Prospectus Regulation
- Securities are traded on EU-regulated markets or multilateral trading facilities (MTFs)
- Securities are broadly marketed with non-negotiable terms and subjected to a market test
- EU originators or sponsors can demonstrate that the transactions are not offered to an undefined public
To ease the compliance burden, the Joint Committee recommends simplifying due diligence obligations, particularly for institutional investors, by promoting structured data formats and enhanced sell-side information provision. Further proposals include more proportional reporting templates, increased data standardization, and targeted exemptions for small and medium-sized enterprises (SMEs). The report proposes focused adjustments to improve the efficiency of the Simple, Transparent, and Standardized (STS) framework. Strong supervisory convergence is needed to prevent fragmentation and ensure consistent application across member states.
These recommendations will support the European Commission’s legislative review of the framework.
On 27 March 2025, the European Securities and Markets Authority (ESMA) published a Peer Review on the implementation of the Simple, Transparent and Standardised (STS) securitisation requirements.
It examines and provides recommendations on the supervisory approaches adopted by selected national competent authorities (NCAs) when overseeing STS securitization transactions and the activities of their originators, sponsors, and securitization special purpose entities.
The Peer Review focused on the authorities of France, Germany, Portugal, and the Netherlands. However, recommendations and good practices set out could be considered by all NCAs in the EU.
ESMA recommends that all NCAs implement an approach combining transaction-based and entity-based supervision tailored to the size of their securitization market. NCAs should build on their existing efforts and expand their approach to ensure the risks arising from STS securitization transactions are adequately identified, assessed, and addressed.
Additionally, ESMA suggests that some NCAs would benefit from introducing a more structured supervisory framework, a risk-based approach, and sufficient resources for STS supervision. The recommendations aim to support all EU NCAs, encouraging them to continue monitoring the evolution of their STS markets and adapt their supervisory approach and resource allocation as needed.
Updates:
- On 11 April, ESMA released new Q&As on the European crowdfunding service providers for business Regulation and on the Markets in Crypto-Assets Regulation.
- On 8 April, the EBA published the list of institutions participating in the 2025 supervisory benchmarking exercise.
Public consultations
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Pietro Chiarelli is Financial Policy Analyst at the SAFE Policy Center.
Sara Fadavi is Financial Policy Analyst at the SAFE Policy Center.
