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.
Market integration package
On 4 December 2025, the European Commission published a long-awaited market integration and supervision package, a cornerstone of the Savings and Investment Union (SIU) initiative. The legislative package comprises a Master Regulation, a Master Directive, and a Proposal for a Regulation on Settlement Finality, all of which aim to create a single, frictionless market for financial services.
The following four elements are particularly important: strengthening of the supervisory powers of the European Securities and Markets Authority (ESMA), changes to ESMA governance, changes to the consolidated tape, and automatic passporting for funds.
- Proposed changes to the ESMA Regulation and related regulations would grant ESMA direct supervisory power over significant trading venues, Central Counterparties (CCPs), Central Securities Depositories (CSDs), and Crypto-asset service providers (CASPs). The approach follows the mix of supranational and national supervision used in banking regulation.
- The new ESMA governance structure would improve its independence from national bias. This change would mirror the leadership style of the Anti-Money Laundering Authority (AMLA). An Executive Board, comprising full-time independent experts, would replace the Management Board as the primary decision-making body. The current Management Board has six members who are selected from national supervisory authorities. Executive Board members would be chosen through an open procedure. The ESMA Board of Supervisors would select candidates from a shortlist put forward by the Commission shortlist. The European Parliament and the European Council would then have to approve them.
- Amendments to the Markets in Financial Instruments Regulation (MiFIR) aim to harmonize pre-trade and post-trade data reporting, data formats, and contribution obligations for trading venues and similar entities. They also mandate real-time data transmission to consolidated tape providers (CTPs). The selection process for the CTP for shares and ETFs is currently ongoing with a decision expected by the end of 2025.
- Amendments to the Undertakings for Collective Investment in Transferable Securities directive (UCITS), the Alternative Investment Fund Managers Directive (AIFMD), and the Markets in Financial Instruments Directive (MiFID II) remove duplicative national filing for funds. This reduces the bureaucratic burden. Simultaneously, changes to the Cross-Border Distribution Regulation (CBDR) introduce automatic passporting. Under the new regime, the national competent authority in a fund domicile will automatically share all filed fund information with NCAs in which the fund is active, thereby removing national discretion over fund activity and availability.
The package will now be subject to the standard legislative procedure and will be discussed by the European Parliament and the Council.
Freeze on Russian assets
On 12 December 2025, the European Council adopted a Regulation on emergency measures addressing the economic damages inflicted on the EU by the Russian war against Ukraine, invoking Article 122 (1) TFEU. The regulation aims to prevent any transfer of assets to the Central Bank of Russia or anyone acting on its behalf, thereby putting an indefinite freeze on them. To this end, any natural or legal person, including banks, central banks, CCPs, and insurance providers, must report all Russian assets in their control or to which they are a counterparty to the Commission by 14 March 2026 and every three months thereafter. The Regulation entered into force on 13 December. The Commission is obligated to review whether the causes for justifying the Regulation still exist by 31 December 2026 and every 12 months thereafter and present the report to the European Council.
Originally, this Council decision was tied to a Commission proposal for a Regulation establishing Reparations Loan to Ukraine, published on 3 December 2025. This instrument would have made use of the fact that the frozen Russian assets lead to the accumulation of cash due to interest, dividends, coupon payments etc. on the assets whose transfer to Russia are not permitted. Under this Regulation, the EU would have transformed these cash balances into a debt financing instrument to provide loans to Ukraine to support financial stability, repayable only, once Russia pays Ukraine reparations after the war. However, on 19 December the European Council could not agree to this plan and endorsed a joint debt instrument instead.
Meanwhile, the European Commission adopted a Delegated Regulation to add Russia to the list of high-risk jurisdictions for deficiencies against anti-money laundering and counter-financing of terrorism (AML/CFT), following a decision by the Financial Action Task Force (FATF) in July. This implies enhanced customer due diligence, as well as additional countermeasures, such as limits or safeguards on transactions and business relationships, which include Russia.
Updates:
- Omnibus and simplification package: In a vote on 16 December 2025, the European Parliament approved the text on sustainability reporting and due diligence. A compromise in line with the political agreement reported in the November Regulatory Radar was reached with the Council on 9 December 2025. The legislation will enter into force after formal endorsement by the Council and report in the Official Journal.
Public consultations
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Vincent Lindner is Head of the SAFE Policy Center.
