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.
Omnibus Directive: EU proposals to simplify regulations and boost competitiveness
On 26 February 2025, the European Commission introduced new proposals (here and here) to streamline EU regulations and enhance competitiveness, aligning with the vision outlined in the Competitiveness Compass and the Draghi report. The first two "Omnibus" packages focus on simplifying rules for businesses, particularly small and medium-sized enterprises (SMEs), to foster a favorable business environment and drive growth. Key measures include making sustainability reporting more accessible, simplifying due diligence processes, strengthening the carbon border adjustment mechanism, and unlocking opportunities in European investment programs. These proposals aim to reduce administrative burdens by 25 per cent overall and by 35 per cent for SMEs by 2029.
The proposal focuses on amending key directives, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy regulations.
For the CSRD, the proposal reduces the scope of mandatory, exempting smaller companies and listed SMEs. It introduces a proportionate standard for voluntary reporting by smaller companies and extends protections to reduce trickle-down effects on SMEs in the value chain. The proposal also eliminates the requirement for sector-specific reporting standards and clarifies assurance requirements to prevent future increases in costs. Additionally, it postpones the entry into application of reporting requirements for certain companies to avoid unnecessary costs.
For the CSDDD, the proposal simplifies due diligence obligations by focusing on direct business partners, with exceptions for cases of circumvention or known adverse impacts. It reduces the frequency of periodic monitoring from one year to five years and clarifies stakeholder engagement processes. The proposal also removes the obligation to terminate business relationships as a last resort and simplifies the definition of stakeholders. Furthermore, it deletes the minimum cap for financial penalties and removes specific EU-wide liability regimes, while maintaining access to justice for victims of human rights violations and environmental impacts.
For the EU Taxonomy, the proposal simplifies reporting requirements by introducing a materiality threshold and allowing voluntary reporting for certain activities. It also simplifies reporting templates and postpones certain reporting requirements. Additionally, it clarifies the application of the Do No Significant Harm criteria in the Taxonomy Climate and Environmental Delegated Acts to reduce compliance burdens.
Additionally, the European Commission published Q&As on simplification.
CSDR: First set of technical standards on the CSDR Refit and a proposal on T+1 settlement
On 20 February 2025, the European Securities and Markets Authority (ESMA) published three final reports on the Central Securities Depositories Regulation (CSDR) Refit to recalibrate and clarify the CSDR framework. The Final Report on Draft RTS on CSD Substantial Importance outlines the criteria for assessing the substantial importance of central securities depositories (CSDs) in a host Member State. This report introduces regulatory technical standards (RTS) that streamline the information CSDs must provide to national competent authorities (NCAs) for review and evaluation, ensuring a harmonized approach across the EU.
The Final Report on Technical Standards on Review and Evaluation focuses on enhancing the review and evaluation process of CSDs. It proposes technical standards, including standard forms, templates, and procedures, to improve the process’s efficiency and effectiveness. These standards aim to strengthen the consultation of relevant authorities and extend the range of authorities that receive the evaluation results.
The Final Report on Third-Country CSDs addresses the information that third-country CSDs must notify when providing notary, central maintenance, and settlement services in the EU. This report clarifies the requirements for third-country CSDs, ensuring they accurately understand and comply with EU regulations. It streamlines the notification process to reduce the reporting burden while maintaining comprehensive oversight.
These reports aim to promote greater transparency and strengthen the supervision of CSDs both within and outside the EU. The proposed measures aim to enhance the overall functioning of the securities settlement system, ensuring robust and efficient market operations.
On 12 February 2025, the European Commission proposed a Regulation amending the Central Securities Depository Regulation (CSDR) to shorten the EU settlement cycle from two days (T+2) to one day (T+1) for transactions in transferable securities executed on trading venues. This change aims to align EU markets with global trends. The move to T+1 is expected to enhance market efficiency, reduce risks, lower costs, and promote deeper, more liquid capital markets in the EU. It will also prevent market fragmentation and ensure harmonization with global financial markets. The EU T+1 Governance, comprising ESMA, the European Central Bank, the Commission, and the financial industry, will oversee the transition to ensure a smooth process. The proposal, which sets 11 October 2027 as the appropriate date for the move to T+1 settlement, aims to strengthen the Savings and Investments Union.
Banking Union: The Pillar 3 Data Hub and an Opinion on the Interaction Between the Output Floor and Pillar 2 Requirements
On 12 February 2025, the European Banking Authority (EBA) published its Final Draft Implementing Technical Standards on IT solutions for public disclosures by institutions, other than small and non-complex institutions, of the information referred to in Titles II and III of Part Eight of Regulation (EU) No 575/2013. In this final report, the EBA outlines the establishment of a centralized data hub for Pillar 3 disclosures. This hub will serve as a single electronic access point on the EBA website, centralizing prudential disclosures by institutions. The implementation of this data hub aims to streamline the reporting process, enhance transparency, and improve accessibility to critical financial data for both regulators and the public. By consolidating disclosures, the EBA seeks to reduce the administrative burden on institutions and ensure that essential information is readily available, thereby promoting greater market discipline and supervisory oversight.
SAFE has contributed with a response to the Consultation launched by the EBA in October.
ECB: Decision on access by non-bank payment service providers to Eurosystem central bank operated payment systems and central bank accounts
On 27 January 2025, the European Central Bank (ECB) issued the Decision ECB/2025/2 formalizing access by non-bank payment service providers (PSPs) to Eurosystem central bank-operated payment systems and central bank accounts. This decision contributes to the broarder access policy, which aims to enhance the efficiency and smooth functioning of the retail payments market and facilitate the provision of instant payments across the euro area. The decision establishes uniform, non-discriminatory, and risk-based criteria for non-bank payment service providers seeking direct access, promoting competition and innovation while safeguarding the resilience and security of payment systems.
The decision becomes applicable on 9 April 2025.
Updates:
- On 21 February 2025, ESMA released new Q&As on the Assessment of significance for the purpose of the Error and Omission Notifications (here) and the Reporting of Settlement Rate Options (here) under the European Market Infrastructure Regulation. Furthermore, it published new Q&As on the calculation of the threshold in Article 1 (here) and on crowdfunding multiple offers (here) under the European crowdfunding services providers for business Regulation. An additional Q&A was released on open interest threshold in energy derivatives under the Markets in Financial Instruments Directive II (here).
Public consultations
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Pietro Chiarelli is Financial Policy Analyst at the SAFE Policy Center.
