On 18 June 2025, the Council of the European Union (“Council”) published a press release announcing that its Permanent Representative Committee (“COREPER”) has agreed the Council’s negotiating mandate on the legislative proposals relating to the Directive on payment services and electronic money services in the internal market (“PSD3”) and the Payment Services Regulation (“PSR”).

This decision marks a pivotal moment in the legislative process, giving a green light to the Council presidency to begin negotiations with the European Parliament (“Parliament”) on the final text of the proposals.  Once agreed by the co-legislators (the Council and the Parliament), the proposals will create a new payment services regulation and will amend the existing payment services directive (PSD2) to create a more modern framework in this field. 

Background

The European Commission (“Commission”) first published its proposals to modernise the EU payment services on 27 June 2023.  The PSD3 and PSR proposals are part of the Commission's broader Digital Finance Strategy, aimed at fostering innovation, enhancing consumer protection, and strengthening the EU’s financial ecosystem.  It should also unlock new ways of channelling funding to EU businesses, in particular SMEs.

Key Proposed Amendments

The Council’s position introduces several key enhancements to the current framework including:

• stronger anti-fraud measures, for example including electronic communications service providers, such as internet carriers and messaging platforms, in the fraud prevention scope;
• enhanced protection for payment service users, such as extending the time limit for payment service providers (“PSP”) to refund consumers who have been victims of impersonation fraud from 10 to 15 business days;
• measures aimed at further supporting open banking; and
• an obligation to have limits on payment instruments rather than allowing these to be agreed between the payer and the PSP.

Next Steps

Inter-institutional negotiations can now begin to ultimately agree on a final text. The final text will then be subject to adoption by both the Parliament and the Council. 

On 19 June 2025, the European Insurance and Occupational Pensions Authority (“EIOPA”) published its response (“Response”) to the European Commission’s (“Commission”) consultation (“Consultation”) on the integration of EU capital markets.

The Commission launched the Consultation in April 2025, for more information, see FIG Top 5 at 5 dated 17 April 2025. 

The Response notes that the single market is a “functioning reality” in the insurance sector, with many insurance groups carrying out a great amount of their business across multiple member states, utilising the freedom to provide services (“FoS”) or the freedom of establishment (“FoE”). 

However, EIOPA points out that improvements are needed, as regards the current supervisory framework, in order to address current and emerging challenges and to bolster consumer confidence, further noting that “Well-functioning supervision contributing to the stability of and trust in the market and its products is key to achieving the Savings and Investments Union’s objectives in full.”

The Response provides an overview of EIOPA’s position on the main issues and includes proposals aimed at enhancing trust in the single market, under the following headings:

Cross-border business supervision – insufficient powers

Under this heading, EIOPA notes that when a home national competent authority (“NCA”) fails to act, the tools currently available are not binding or may not be effectively used. In order to address such issues, EIOPA proposes two options, as follows:

• supervision of individual (re)insurance undertakings with significant cross-border activity – that is where more than 50% of the business is conducted under FoE or FoS across multiple host member states – would be transferred to EIOPA (joint supervision with relevant NCAs); or
• maintain the current system where NCAs supervise all cross-border activities, but introduce enhancements to relevant tools (proposed by EIOPA in the Response), allowing mechanisms for effective enforcement.

A majority of EIOPA’s Board of Supervisors (“BoS”) are in favour of option two – enhancing existing tools.

Simplification of the supervision architecture

The Response notes that equal treatment of policyholders across the EU requires high-quality supervision in all member states, with such supervision being supported by a robust supervisory review process and adequate supervisory and enforcement powers to ensure compliance with EU law. However, the Response states that there are divergences as regards national implementation together with ways in which national supervisors may exercise key powers.

The Response sets out two options to address such matters, as follows:

• assign EU-level competence for highly specialised lines of business or areas where supervisory capacity is still developing. This would improve efficiency by avoiding duplication across 28 authorities and creating one centre of expertise to attract talent and achieve economies of scale; or
• retain the current system, but strengthen existing supervisory convergence tools, such as:
  • product intervention;
  • warnings;
  • technical assistance; and
  • thematic reviews.

A majority of EIOPA’s BoS are in favour of option two – retaining the current system and strengthening existing supervisory convergence tools.

Better use of EIOPA on Internal Model supervision

The Response identifies the oversight of internal models (“IMs”) as an area where supervisory simplification could be achieved. The Response sets out that EIOPA  has noted, through its recent work, that there is a need for greater consistency in both the approval and ongoing supervision of IMs to ensure comparable capital requirements in all member states and a level playing field across the EU, so as to enhance the competitiveness of the single market.

The Response suggests that EIOPA’s role in the colleges of supervisors could be strengthened to represent the broader EU perspective. Further, the Response notes that broader involvement, as regards EIOPA decisions, could potentially further enhance the expertise of both EIOPA and NCAs.

The Response sets out two options as regards the colleges of supervisors, as follows:

• grant EIOPA staff the ability to participate in the joint decisions on IMs, on a  par with the supervisory authorities concerned or alternatively, there should be a formal requirement for the authorities involved to duly consider EIOPA’s opinion in their decision making; or
• ensure that EIOPA receives all relevant information on the joint decision simultaneously with the supervisory authorities concerned.

The Response also makes recommendations as regards joint on-site inspections to address specific concerns and harmonise supervisory practices, particularly that the following should be included in Solvency II and IDD: “In the event of disagreement within the platform or college, EIOPA may decide on its own initiative, to initiate and if needed coordinate on-site inspections.”

On 18 June 2025, the European Banking Authority (“EBA”) launched a consultation (“Consultation”) on draft regulatory technical standards (“RTS”) specifying the minimum list of information to be provided to competent authorities at the time of a qualifying holdings notification under article 23(6) of Directive 2013/36/EU (“CRD”).

Article 22(1) of CRD requires that a person intending to acquire a qualifying holding in a credit institution notifies the competent authorities in writing about the firm in which they are seeking to acquire, or increase, a qualifying holding.

The RTS seek to set out a minimum list of information to be submitted by the proposed acquirer to the competent authority and include information regarding:

• the identity, past convictions, financial soundness and financial and non-financial interests in the target institution of the natural or legal persons intending to acquire the holding;
• the good repute, knowledge skills and experience of the members of the management body where the proposed acquirer intends to appoint / replace members of the management body of the target institution;
• the sound and prudent management of the target institution following the proposed acquisition, including the proposed acquirer’s strategy in respect of the acquisition, the estimates of the applicable prudential ratios, and the information on the new group structure after the acquisition of the qualifying holding; and
• the legitimate origin of the sources of funding for the acquisition, including when they are borrowed, as well as information about the assets that have to be sold by the acquirer, and on the channels used to transfer such funds.

Proportionality

The Consultation states that appropriate consideration has been given to proportionality, taking into account that the information to be provided has to be proportionate to the size of the holding and the expected influence that the proposed acquirer will exercise on the target institution.

Duplication

The Consultation also address duplication of burdens and operational efficiencies, by providing an exemption, in the RTS, as regards the proposed acquirer having to submit information that is already in the possession of the competent authority of the target institution where the conditions set out in the draft RTS are met.

Next Steps

The Consultation is open for feedback until 18 September 2025, with the EBA welcoming comments on all proposals in the Consultation, particularly on the specific questions set out in section 5.2.

The RTS will be submitted to the European Commission for adoption, following which, they will be scrutinised by the European Parliament and the European Council. 

1. Commission adopts delegated regulation amending RTS on transparency requirements under MiFIR

On 18 June 2025, the European Commission (“Commission”) adopted Delegated Regulation C(2025) 3104 (“Amending Regulation”).

The Amending Regulation amends the regulatory technical standards (“RTS”) set out in delegated regulations (EU) 2017/583 and (EU) 2017/587 as regards transparency requirements for trading venues and investment firms in respect of bonds, structured finance products (“SFPs”), emission allowances, and equity instruments under the Regulation on Markets in Financial Instruments (“MiFIR”).

Final reports were submitted to the Commission by the European Securities and Markets Authority (“ESMA”) in December 2024. For more information, see FIG Top 5 at 5 dated 19 December 2024.

As a result of the MiFIR Review, which entered into force on 28 March 2024, the RTS need to be updated.

The amendments to Delegated Regulation (EU) 2017/583 (set out in article 1) made by the Amending Regulation, aim to achieve the following:

• update the definitions;
• update and / or delete provisions to ensure alignment with the reviewed MiFIR provisions that are already applicable;
• update pre-trade transparency requirements in respect of bonds, SFPs and emission allowances; and
• calibrate post-trade transparency requirements for bonds, structured finance products and emission allowances.

The amendments to Delegated Regulation (EU) 2017/587 (set out in article 2) aim to achieve the following objectives:

• specify the details of pre-trade data to be made public by market operators and investment firms operating a trading venue in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments;
• refine the methodology to determine the most relevant market in terms of liquidity;
• specify pre-trade transparency requirements for systematic internalisers;
• further specify the characteristics of transactions not contributing to the price discovery process, and therefore exempt from the shares trading obligation;
• allow for the discontinuation of data collection in the Financial Instruments Transparency System (“FITRS”) and in the Double Volume Cap System (“DVCAP”) and for the use of transaction data, reported under article 26 of MiFIR, as the data source to perform transparency calculations for equity instruments; and
• update and / or further refine certain other provisions.

Next Steps

The Amending Regulation will now be subject to scrutiny by the European Council and the European Parliament and if neither object, it will enter into force 20 days following its publication in the official journal of the European Union.

Article 1 and point (2), points (3)(a) and (c), point (5), point (10)(a), and point (13) of article 2 will apply from 2 March 2026.

2. ESMA call for evidence on streamlining financial transaction reporting under MiFIR

On 23 June 2025, the European Securities and Markets Authority (“ESMA”) launched a call for evidence (“CfE”) on the simplification of financial transaction reporting under the Markets in Financial Instruments Regulation (“MiFIR”), the European Market Infrastructure Regulation (“EMIR”) and the Securities Financing Transactions Regulation (“SFTR”).

The CfE aims to identify ways in which compliance with financial regulatory reporting requirements could be streamlined and simplified without risking robust supervisory oversight. Such streamlining and simplification forms part of the efforts as regards burden reduction on the part of ESMA, as well as efforts towards reducing the costs associated with such financial reporting, in the context of the European Commission’s Competitiveness Compass. 

Specifically, as regards the costs burden, the CfE points out that transaction reporting is one of the costliest areas in the financial sector, estimated at  somewhere between €1 to 4 billion every year.

The CfE states that most of these burdens and costs stem from the siloed sectorial approach in the respective frameworks, which has led to overlaps and misalignments.

Structure of the CfE

Section 3 of the CfE sets out a number of main issues stemming from the existence of multiple regulatory regimes with duplicative or inconsistent requirements, some of which are as follows:

• different terminology and definitions within different reporting regimes;
• duplication of IT systems and processes;
• reference data reporting duplications; and
• frequent regulatory changes and lack of flexibility to enable a phased implementation, synchronisation and coordination of the changes in the different reporting regimes.

Section 4 of the CfE outlines the two different simplification options, as follows:

• option 1- removal of duplication in current frameworks. This approach is based on the elimination of duplications in the scope of the reporting requirements without directly changing the legal set up for the current reporting channels and the relevant infrastructures to collect the data; and
• option 2 – employing the ‘report once principle’, involving the creation of a unified template for reporting information that was previously distributed across various regimes.

Existing Reporting Frameworks and MiFIR Review  

ESMA has stated that while the consultation and analysis of feedback received is in train, it will not propose changes to the existing reporting frameworks on transaction reports, order data and reference data under the ongoing review of MiFIR. Instead, ESMA will publish final reports summarising the feedback received to the consultations as regards those areas.

By pausing the changes to these regulatory technical standards, ESMA hopes to provide market participants with an opportunity to freeze their implementation efforts, which, it states, will immediately contribute to burden reduction by avoiding implementation costs in the short term.

ESMA has stated that the remainder of the MiFIR Review will proceed as planned.

Next Steps

The CfE is open for feedback until 19 September 2025. Having considered feedback received, ESMA expects to publish a final report early in 2026, setting out the main areas to be addressed by the simplification exercise and the definition of the preferred simplification option.   

3. ESMA launches selection of CTP for shares and ETFs

On 20 June 2025, the European Securities and Markets Authority (“ESMA”) published a press release (“Press Release”) stating that it has launched its selection procedure for the consolidated tape provider (“CTP”) for shares and exchange-traded funds (“ETFs”).

In the Press Release, ESMA refers interested applicants to the regulatory technical standards (“RTS”) adopted by the European Commission on 12 June 2025, which are as follows:

• RTS as regards specifying the input and output data of consolidated tapes, the synchronisation of business clocks and the revenue redistribution by the consolidated tape provider for shares and ETFs, and its annexes; and
• RTS on the obligation to make market data available to the public on a reasonable commercial basis, and its annexes.

ESMA has stated that the RTS will be used as the basis for the assessment of some criteria. For more information on the RTS, see FIG Top 5 at 5 dated 19 June 2025.

Next Steps

ESMA will assess  submitted requests against the exclusion and selection criteria and will invite successful candidates to submit an application, with a decision as to the selected applicant expected by the end of 2025.

The successful applicant will  be selected to operate the CTP for five years and will invited to apply for authorisation by ESMA.

On 17 June 2025, the European Commission (“Commission”) adopted a package of legislative proposals (“Proposals”) aimed at making the EU securitisation framework simpler and more fit for purpose.

The regulatory changes adopted by the Commission are targeted at boosting the EU securitisation market by removing undue barriers to issuance and investment, ultimately resulting in financial institutions engaging in more  securitisation activity with the capital relief being used for additional lending to EU households and businesses.

The Proposals include amendments to:

• the Securitisation Regulation;
• the Capital Requirements Regulation;
• the Liquidity Coverage Ratio Delegated Regulation; and
• the Solvency II Delegated Regulation.

Matheson Insight

Matheson’s Finance and Capital Markets Department has published an insight, “EU Securitisation Framework – Legislative Proposal Announced”, on this latest development, for more information, please see here.