EU ministers agree to transfer part of capital markets supervision to ESMA

EU finance ministers have reached a political agreement on the key elements of the package for the integration and supervision of capital markets. The compromise would transfer to the European Securities and Markets Authority direct supervision of certain entities considered significant and would reform the authority’s governance, while maintaining a role for national supervisors. The legal text must be finalized, and the European Parliament must establish its own position before negotiations between the institutions.

Finance ministers of the European Union reached an agreement on 9 October on the key elements of the package for the integration and supervision of capital markets, a central file for the European project of the Savings and Investments Union. The compromise would extend direct supervision at European level by the European Securities and Markets Authority, ESMA, to certain entities considered significant and would modify the authority’s governance structure, in an attempt to reduce fragmentation among the 27 national systems.

However, the agreement does not represent the definitive adoption of the new rules. The Council Presidency must turn the political compromise into a consolidated legal text, and the European Parliament has not yet completed its own position on the three legislative files forming the package. Interinstitutional negotiations can begin after the Parliament’s mandate has been established.

In brief

The Council reached a political agreement on the key elements of the package for the integration and supervision of capital markets.

The compromise provides for direct supervision by ESMA of certain significant entities, defined through objective and proportionate criteria.

ESMA would receive an independent executive committee for direct supervision and operational management, while the Board of Supervisors would retain decision-making powers regarding regulation and convergence.

National authorities remain involved in the new architecture. The compromise does not transfer all national financial supervision to Brussels.

The package is not yet law: the Council text must be finalized, and Parliament must adopt its own position before the final negotiations.

The reform addresses one of the structural problems of the European economy: capital markets continue to operate largely through national frameworks, while companies operating in several countries face different rules, supervisory practices and procedures. Brussels has been trying for several years to create a market in which Europeans’ savings can more easily finance companies’ investments across the Union, reducing the European economy’s dependence on bank financing and external capital.

The Market Integration and Supervision Package, MISP, proposed by the Commission in December 2025, seeks to intervene simultaneously in several components of financial infrastructure and fund administration. The legislative file includes amendments to the rules concerning ESMA, markets in financial instruments, market infrastructures, central counterparties, central securities depositories, credit rating agencies, securitization, crypto-assets, green bonds and the cross-border distribution of funds.

A separate component amends the directives on undertakings for collective investment, alternative investment fund managers and markets in financial instruments. The Commission also proposed reducing barriers to the cross-border provision of funds, simplifying managers’ activities and strengthening ESMA’s powers regarding the convergence of supervisory practices. A third file concerns the rules on settlement finality and financial collateral, the technical infrastructure through which financial transactions become irreversible and assets are transferred securely.

The compromise negotiated by the member states goes further in the direction of direct European supervision for certain entities. Simon Harris, Tánaiste and Minister for Finance of Ireland, who chairs ECOFIN, explained after the meeting that significant entities would come under ESMA’s direct supervision on the basis of objective and proportionate criteria. The details of these criteria still need to be set out in the final legal text, meaning that the political agreement does not yet allow a definitive list to be established of the companies or infrastructures that will come under direct European control.

The reform also changes how ESMA operates. The compromise provides for an independent executive committee that would be responsible for direct supervision and operational management. The current Board of Supervisors, in which national authorities are represented, would continue to take decisions on regulatory action and the convergence of supervisory practices.

This structure reflects one of the main political tensions in the file. More centralized supervision can reduce differences between countries and make it easier for entities operating across several markets, but the transfer of powers to a European authority raises questions about costs, accountability and the role of national authorities. The Council compromise attempts to combine the transfer of certain direct powers to ESMA with the continued participation of national supervisors.

The agreement therefore does not mean the creation of a single supervisor that will replace the financial authorities of the member states. The central criterion is the significance of the entity or supervised activity, while national systems continue to have powers within the proposed architecture. The Council states that the reform must combine stronger European supervision with accountability, cost control and national involvement.

There is also a visible difference between the assessment of the Council Presidency and that of the Commission. Harris presented the compromise as major progress for the integration of European markets and argued that the transfer of powers to ESMA is substantial. Valdis Dombrovskis, European Commissioner for Economy and Productivity, Implementation and Simplification, said that the European executive would have preferred a more ambitious outcome, even though he described the agreement as an important step in the negotiations.

This difference is relevant to the next stage. The Council’s final position will become one of the bases for negotiations with the European Parliament, where the package is divided into three legislative procedures. The Commission will participate in the negotiations and will seek to preserve as many as possible of the elements of the initial proposal concerning integration and joint supervision.

In Parliament, the files are before the Committee on Economic and Monetary Affairs, ECON. Markus Ferber is rapporteur for the main regulation on the integration and supervision of markets, Eero Heinäluoma for the amendments to the directives on funds and financial markets, and Giovanni Crosetto for the file concerning settlement finality. Parliament must establish its mandate before trilogues can begin.

For companies and investors, the reform’s potential effect is not the introduction of a new European financial product, but a change in how the market operates. More uniform supervision can reduce differences in interpretation and administrative costs for cross-border operators, while simplifying fund distribution can facilitate the access of financial products to markets in several member states.

For individual investors, the agreement does not create an obligation to transfer savings into investments and does not determine how households must use their money. “Savings and Investments Union” is the political framework through which the EU is seeking to eliminate obstacles that prevent capital from moving between countries and to give European companies more financing options.

The fundamental issue is Europe’s capacity to mobilize capital for investments that exceed the possibilities of public budgets. The energy transition, digitalization, the defense industry, infrastructure and the development of innovative companies require large volumes of capital, while the fragmentation of European markets limits the ability of savings available in one member state to efficiently finance investments in another.

The Council has set the political objective of moving rapidly forward with the package and has declared its readiness to begin negotiations as soon as Parliament adopts its mandate. The timetable thus remains dependent on progress on the three files in Parliament and on the completion of the Council’s technical text. Until then, the agreement of 9 October represents the member states’ political position on the key elements of the reform, not new rules already applicable in European financial markets.

https://2eu.brussels/ro/news/ministrii-ue-convin-asupra-transferului-unei-parti-din-supravegherea-pietelor-de-capital-catre-esma