On 21 October 2025, the European Commission (“Commission”) published its work programme, (“Programme”) for 2026.

The Programme sets out the most important new policy and legislative initiatives that the Commission will focus on in the year ahead, building on the political guidelines document for the next European Commission 2024−2029, the mission letters sent by President von der Leyen to the Commissioners and also reflecting the ideas set out in the 2025 state of the Union address – for more information, see FIG Top 5 at 5 dated 26 September 2024 and FIG Top 5 at 5 dated 11 September 2025 .

Simplification

The Commission previously set targets to reduce administrative burdens by at least 25%, and at least 35% for small to medium enterprises, without compromising on policy objectives. In this regard, the Commission has already published several omnibus proposals and other simplification measures aimed at delivering €8.6 billion in annual savings for European businesses and citizens.

Continuing the Commission’s focus on simplification, more than half of the legislative initiatives in the Programme are focused on burden reduction. The Commission has also stated that it will continue to assess EU laws and implementing rules in order to see whether they are necessary to fulfil policy objectives and to see where it can act to ease accumulated and undue burdens.

The Commission also adopted its first overview report on simplification, implementation and enforcement on 21 October 2025, reflecting the progress achieved so far as regards simplification.

Competitiveness

The Programme reaffirms the Commission's commitment to increasing Europe’s competitiveness, stating that the implementation of the Draghi report must be accelerated. From a financial services perspective, the Programme states that the Commission will focus on “unleashing the full potential of the Single Market by 2028” , by, amongst other things, removing barriers in capital and making access to finance in Europe easier for all companies.

Additionally, the Commission will be putting forward the remaining proposals as regards the savings and investment union, which will include the strengthening of shareholder rights and a comprehensive analysis on competitiveness in the EU banking sector.

Annexes

The Programme contains five annexes, as follows:

• Annex I: New initiatives – the table in this annex sets out the new initiatives, and the related policy objectives, that the Commission will pursue in 2026. Those with a blue background represent simplification initiatives or those with a strong simplification dimension. It also includes omnibus packages and simplification proposals, together with other initiatives to simplify legislation, such as the updates of the venture capital funds regulation and the rules on shareholder rights.
• Annex II: Annual Plan on evaluations and fitness checks – this table contains 20 planned evaluation and fitness checks. From a financial services perspective, the following may be of interest: the Whistleblowing Directive and the Shareholder Rights Directive.
• Annex III: Pending proposals  - this annex contains proposals pending adoption. The Commission has examined all pending proposals in order to decide whether they should be maintained, amended or withdrawn in the light of their adoption date, progress in the legislative process and alignment with the EU's priorities.

Accordingly, this annex sets out 151 pending proposals where the Commission wants the European Parliament and the European Council to reach agreement. Some of the pending proposals listed under the section entitled “A new plan for Europe’s sustainable prosperity and competitiveness” in this annex, may be of interest to the financial services sector.

• Annex IV: Withdrawals – this annex contains the pending legislative proposals which the Commission intends to withdraw within six months. None of them are relevant to the financial services sector.
• Annex V: Envisaged repeals – this annex does not contain any proposals relevant to financial services.

Welcoming the publication of the Programme, President von der Leyen stated:

“The 2026 work programme marks another significant step towards a stronger, more sovereign Europe. We will continue working closely with the European Parliament and the Council to deliver on Europe’s priorities, to boost competitiveness, harness the power of our Single Market, simplify our rules and address the affordability crisis.”

On 16 October 2025, the Joint Committee (“JC”) of the European Supervisory Authorities (“ESAs”) published its work programme (“Programme”) for 2026. Some of the JC’s priorities are as follows:

• a continued focus on DORA, particularly as regards  the effective operation of the new oversight framework and work related to the supervisory convergence of DORA. In addition, the JC will focus on its new functions under DORA, such as, incident reporting and crisis coordination;
• work related to the strengthening of European consumer confidence and protection in the banking, insurance and pensions sectors will also be a priority – particularly in light of the European Commission’s strategy as regards the savings and investment union. Some of the specific areas that the JC will focus on include work on the PRIIPs key information document and also financial education;
• the JC will continue its prioritisation of sustainable finance. As regards the SFDR, the Programme sets out that the ESAs will monitor the on-going review of the Level 1 text while providing clarifications where necessary on the existing framework. 

Additionally, the JC will also work on issuing joint guidelines on high-level principles to carry out ESG stress testing;

• a continued focus on cross sectoral risks, assessing key trends and vulnerabilities to financial stability and producing targeted cross-sectoral risk analysis in addition to the ESAs’ respective sectoral risk analysis;
• the JC will continue to collaborate on other cross-sectoral matters such as financial conglomerates, innovation facilitators and credit assessment institutions;
• continue regulatory work as regards external credit assessment institutions (“ECAIs”) under the Capital Requirements Regulation (“CRR”) to specify and monitor the correspondence between the relevant credit assessments issued by an ECAI to the credit quality steps set out in CRR and under article 109a(1) of Solvency II; and
• other joint work such as, the 13^th joint consumer protection day / the European single access point / supervisory independence of competent authorities / EMIR bilateral margining. 

1. ESRB publishes report on crypto asset risks and issues recommendation on stablecoins

On 20 October 2025, the European Systemic Risk Board (“ESRB”) published a report (“Report”) on three key topics in the evolution of crypto assets -  stablecoins, crypto-investment products (“CIPs”) and multi-function groups (“MFGs”).

The Report explains that the ESRB chose to focus on those three topics as it was considered that they reflect key dynamics of the “crypto asset ecosystem.”

The Report highlights the growth in the crypto asset market, which led the ESRB, in June 2025, to point to the increased need for monitoring of the growing links between the crypto sector and the financial sector. At that stage, the ESRB also raised concerns about increasing risks posed to financial stability by stablecoins, particularly as regards the fungibility of stablecoins issued in both the EU and third countries which can lead to contagion channels beyond the risks envisaged by the regulation on markets in crypto assets (“MiCA”). 

Stablecoins

As regards stablecoins, the Report notes that the global stablecoin market has more than doubled since 2023 and advises that authorities should continue to study the risks stemming from a situation where stablecoins become more prominent in payment systems.

In addition, the Report highlights the fact that stablecoins and traditional finance are becoming more intertwined and emphasises the need to ensure that eligible reserve assets in the EU are liquid and high quality.

Some further concerns addressed in the Report include:

• the fact that MiCA does not explicitly regulate the joint issuance of the same stablecoin by EU and third country entities which could increase the EU’s exposure to run risks. The Report notes an urgent need for the introduction of safeguards through enhanced supervisory measures, legislative reforms and closer international cooperation; and
• policy challenges stemming from trying to ensure that stablecoins issued outside the EU, that are non-MiCA compliant, are not widely used within the EU.

The ESRB has adopted a recommendation (“Recommendation”) on third country multi-issuer stablecoin schemes, in light of the risks identified in the Report. The Recommendation is aimed at eliminating or mitigating the financial stability risks inherent in third country multi-issuer stablecoin schemes. In that regard, the Recommendation sets out the ESRB’s two part strategy, as follows:

• a recommendation that the European Commission (“Commission”) does not consider such schemes as being permitted in the current MiCA framework, with the Recommendation stating that the Commission should act on this by the end of 2025; and
• in the event that such clarification is not forthcoming, the ESRB urges relevant authorities, such as the European Supervisory Authorities, to mitigate the financial stability risks stemming from such schemes through appropriate safeguards, such as necessary legal reforms. The ESRB has stated that most of its suggested safeguards should be implemented by the end of 2025 with any remaining to be implemented by the end of 2027.

The ESRB has stated that it will monitor the implementation of the Recommendation.

CIPs

Under this heading, the Report notes significant growth in CIPs since January 2024 and also points to the rapidly growing involvement of major financial institutions in such products. Some of the concerns highlighted in the Report include:

• the crypto services market is highly concentrated, particularly as regards custody providers, and so could lead to increased spillover risks into traditional finance, even though EU financial institutions currently play a relatively minor role in this market; and
• in order to address systemic risk, greater transparency is needed around the connections between non-bank financial institutions and crypto firms, with the Report pointing to several main gaps in data such as: limited regulatory data on the crypto holdings of non-bank financial institutions and their interlinkages with the crypto sector / insufficient information on counterparty risks associated with CIPs, crypto derivatives and services.

Such gaps limit the ability to properly analyse the exposure of the financial sector to crypto risks.

MFGs active in crypto asset markets

In MFGs, where crypto assets products and services are offered by entities belonging to the same group as other financial and non-financial firms, the Report found that such groups may be operating in opaque corporate structures and engaging in cross border regulatory arbitrage – presenting challenges for effective supervision, particularly where the groups are based outside the EU.

Accordingly, the Report highlights the need for formal supervisory cooperation mechanisms and group level reporting requirements.   

2. ESMA publishes its second consolidated report on sanctions imposed by national competent authorities

On 16 October 2025, the European Securities and Markets Authority (“ESMA”) published its second consolidated report (“Report”) on sanctions and measures imposed in member states in 2024.

The Report details that more than 970 administrative sanctions and measures were imposed across EU member states in financial sectors under ESMA’s remit. Additionally, the Report states that the highest amount of fines were imposed under the Market Abuse Regulation (“MAR”)  and the Markets in Financial Instruments Directive II (“MiFID II”) – similar to last year, for more information on last year’s report, see FIG Top 5 at 5 dated 17 October 2024.

In this year’s Report more granular data on the types of administrative sanctions and measures, including settlements, were analysed, with such data revealing that  more than 60% of all administrative sanctions and measures imposed in 2024 were administrative fines and 10% were issued using settlement procedures.

MAR

In 2024, 377 administrative sanctions and measures were issued under MAR in 24 member states. Italy imposed the highest number of administrative sanctions and measures at 80, followed by Sweden at 48. The highest amount issued by settlement under MAR in 2024 was imposed in Ireland at €1, 225,000.

MiFID II and MiFIR

In 2024, 294 administrative sanctions and measures were issued in 20 member states under MiFID II and MiFIR. Greece imposed the highest number of administrative sanctions and measures at 84, followed by Hungary at 49 and Romania at 30.

As with last year, the Report notes that Ireland did not impose any measures or sanctions under MiFID and MiFIR in 2024. The Report further notes that that Ireland has not imposed any such sanctions since 2018. In this respect, looking at market size, the Report highlights that Ireland has a mid-sized market in terms of number of investment firms located in the State.

Next Steps

Following on from the Report, ESMA has stated that  that it will work to further foster discussions between national securities markets authorities on the effective and consistent implementation of capital markets rules and continue working towards ensuring that similar breaches lead to similar enforcement outcomes across the EU, regardless of where they have been initiated. 

On 15 October 2025, the European Banking Authority (“EBA”) and the European Securities and Markets Authority (“ESMA”) published their technical advice (“Advice”) to the European Commission (“Commission”) on the investment firms prudential network.

Background

On 1 February 2023, the Commission submitted a call for advice (“CfA”) to ESMA and the EBA under a mandate in article 60 of the Investment Firms Regulation (“IFR”) and article 66 of the Investment Firms Directive (“IFD”), requiring the Commission to submit a report to the European Council and the European Parliament on certain aspects of the IFR and IFD.

Advice

Overall, the EBA and ESMA concluded that the current framework provides a robust and risk sensitive prudential framework tailored to the size, activities and complexity of MiFID investment firms.

The Advice contains 49 recommendations (“Recommendations”), which are aimed at enhancing the proportionality and functioning of the prudential framework. Additionally, they aim to improve the framework’s ability to contribute to a level playing field between investment firms and between investment firms and financial institutions that perform similar activities. 

Some of the matters addressed in the Advice and Recommendations are as follows: 

• the categorisation of investment firms – providing an analysis on the thresholds for investment firms that must apply the Capital Requirements Regulation (“CRR”) and proposing recommendations for improving the definitions and coherence in the calculation methodologies and monitoring;
• the conditions for investment firms that qualify as small and non-interconnected;
• the implications of the adoption of the Banking Package as regards the introduction of the fundamental review of the trading book and how this would apply to investment firms;
• existing liquidity requirements and the possibility of improving the risk sensitivity of the requirements arising from certain activities or services;
• the prudential consolidation of investment firm groups under the IFR framework, proposing improvements to the existing text and extending the scope in line with similar provisions of the CRR, as well as a possible extension of the scope to crowdfunding and crypto service providers; and
• the interaction of the regulation on markets in crypto assets (“MiCA”) and the IFR / IFD in the areas where investment firms may provide services related to crypto assets.

Improvements

Although, the Advice concludes that the current framework achieves its original general objectives, it is highlighted that market participants and supervisors pointed to a number of technical issues and areas for improvement during a consultation on the matter carried out by the EBA and ESMA in June 2024 – for more information, see FIG Top 5 at 5 dated 6 June 2024. 

Accordingly, many of the recommendations aim to:

• promote a more consistent application across EU member states of different aspects of the framework, for example by clarifying terms and definitions concerning the K-factor requirements and prudential consolidation;
• improve the framework’s proportionality and functioning based on the experiences that supervisors and the sector have had with applying the framework since its inception, such as by increasing the thresholds for risk and remuneration committees and by harmonising the methodologies for the categorisation thresholds; and
• improve the framework’s ability to contribute to a level playing field among investment firms within the EU, and also for those firms that compete with market participants on an international level, without compromising on the robustness or risk sensitivity of the framework.

Next Steps

The EBA and ESMA will submit the Advice to the Commission. 

1. Delegated regulations supplementing CRR published in OJEU

On 14 October 2025, two delegated regulations containing regulatory technical standards (“RTS”) supplementing the capital requirements regulation (“CRR”) were published in the official journal of the EU (“OJEU”), as follows:

• Commission Delegated Regulation (EU) 2025/1265 with regard to RTS specifying the method for identifying the main risk driver of a position and for determining whether a transaction represents a long or a short position, as referred to in articles 94(3), 273a(3) and 325a(2).

  The European Commission (“Commission”) adopted this regulation in July 2025 – for more information, see FIG Top 5 at 5 dated 3 July 2025.

• Commission Delegated Regulation (EU) 2025/1311 with regard to RTS specifying the conditions for assessing the materiality of extensions of, and changes to, the use of alternative internal models, and changes to the subset of the modellable risk factors.

This regulation was adopted by the Commission in July 2025 – for more information, see FIG Top 5 at 5 dated 10 July 2025.

Next Steps

Both regulations will enter into force on 3 November 2025, being 20 days following publication in the OJEU.

2. Regulation to shorten settlement cycle under CSDR published in OJEU

On 14 October 2025, Regulation (EU) 2025/2075 (“Regulation”) as regards a shorter settlement cycle in the EU was published in the official journal of the European Union (“OJEU”).  

The Regulation, which amends the central securities depositories regulation (“CSDR”), shortens the settlement cycle on trades in transferable securities, such as transactions in shares or bonds, executed on EU trading venues from two business days (T+2) to one business day after the trade date (T+1).

The European Council and the European Parliament reached political agreement as regards the new rules in June 2025 – for more information, see FIG Top 5 at 5 dated 3 July 2025.

Next Steps

The Regulation will enter into force on 3 November 2025, being 20 days following publication in the OJEU, and will apply from 11 October 2027.

3. ECB regulation on reporting of supervisory financial information published in the OJEU

On 17 October 2025, Regulation (EU) 2025/1958 (“Amending Regulation”) of the European Central Bank (“ECB”) on the reporting of supervisory financial information under the single supervisory mechanism (“SSM”) was published in the Official Journal of the European Union (“OJEU”).

The Amending Regulation amends ECB Regulation (EU) 2015/534 (“Regulation”) on the reporting of supervisory financial information under the SSM. The Regulation applies to supervised entities and groups in the SSM and sets out reporting requirements for credit institutions and rules for the submission of information by national competent authorities to the ECB.

The Regulation also supplements Commission Implementing Regulation (EU) 2024/3117 - which contains the financial reporting requirements for firms within the scope of the Capital Requirements Regulation (“CRR”).

Under the Financial Reporting Regulation, less significant institutions (“LSIs”) are subject to reduced reporting requirements.

The Amending Regulation allows for the ECB to collect additional data points concerning these LSIs so that the ECB can exercise oversight over the functioning of the SSM and promote the consistent application of high supervisory standards. The additional information is also necessary for the ECB to foster comparability of the outcomes of the supervisory review and evaluation process (SREP) assessment.

Next Steps

The Amending Regulation will enter into force on 6 November 2025, being 20 days following its publication in the OJEU, and will apply from 30 December 2025.

4. Better Data Sharing Regulation published in OJEU

On 21 October 2025, Regulation (EU) 2025/2088 (“Regulation”), as regards certain reporting requirements in the fields of financial services and investment support, was published in the Official Journal of the European Union (“OJEU”).

The Regulation aims to improve, streamline and modernise financial services reporting requirements and to limit the administrative burden and avoid undue duplication of reporting for authorities and for entities. Accordingly, the Regulation amends the following EU regulations:

• European Systemic Risk Board Regulation;
• EBA Regulation;
• EIOPA Regulation;
• ESMA Regulation;
• InvestEU Regulation; and
• Regulation establishing the Anti-Money Laundering Authority.

Next Steps

The Regulation will enter into force on 10 November 2025, being 20 days following its publication on the OJEU.