What is the European Commission consulting on?
On 15 April 2025, the European Commission published a targeted consultation on the integration of EU capital markets (Consultation).
This follows the publication of a communication on its strategy for the EU Savings & Investments Union last month (Communication)1 in which it outlined the steps it will take over the next two years to revive the EU economy and increase EU competitiveness. As well as identifying specific legislative proposals that it intends to publish over that period, the European Commission also committed to establishing specific reporting channels in Quarter 2 of this year to allow market participants to outline barriers they have experienced within the EU single market.
The Consultation now seeks feedback from a range of stakeholders on obstacles to financial market integration across the EU, including those operating in the asset management and funds sector.
What sections of the Consultation are most relevant to EU fund managers?
Section 5: Asset management and funds
In this section of the Consultation, the European Commission asks a range of questions intended to help it identify obstacles experienced by EU funds and asset managers in accessing the single market and managing cross-border investment funds. It also seeks feedback on how current requirements could be simplified. These include questions on:
- respondents' experience of the current authorisation process for UCITS funds;
- the current passporting framework for marketing of EU funds throughout the EU;
- the authorisation process and passporting framework applicable to UCITS management companies and AIFMs;
- the key obstacles to consolidating functions across entities within the same asset management group and other barriers to cross-border operations; and
- whether certain portfolio requirements and investment limits applicable to UCITS funds, (including investment limits in a single issuer and the restriction on investment of more than 10% in an issue of a single securitisation) should be amended2.
Section 6: Supervision
In this section of the Consultation, the European Commission seeks general feedback on the effectiveness of the current supervisory framework as well as asking specific questions on the supervision of funds and asset managers in Section 6.6.
This includes asking respondents to rate the current convergence of supervisory practices across Member States in supervising funds and their management companies. The Consultation has also asked stakeholders their views on the benefits of more integrated EU supervision and how more integrated EU supervision could be achieved. For example, it asks whether any of the following should assume responsibility for supervising asset managers with significant EU cross-border activities:
- a single EU supervisor (presumably ESMA);
- a supervisory college, chaired by an EU supervisor, under which responsibility and decision-making would be shared amongst members of that supervisory college;
- a supervisory college described in (ii) above but in this case, chaired by a lead national competent authority (NCA); or
- a supervisory coordination college comprised of all relevant NCAs and ESMA under which supervisory responsibilities would remain unchanged.
It has also asked whether NCAs (such as, in Ireland, the Central Bank) should remain responsible for the supervision of asset managers with limited or no cross-border activities and for the supervision of UCITS funds and AIFs.
Other sections of the Consultation
Certain of the questions posed in Section 1 of the Consultation will also be of interest to EU asset managers, including for example whether greater proportionality should be introduced under AIFMD for smaller fund managers and whether fund managers would benefit from a simplification in the interplay between the UCITS/AIFMD framework and the MiFID framework.
Those fund managers operating ETFs are also asked for feedback on the impact of, and drivers for, multiple listings of ETFs in the EU in Section 2 of the Consultation.
Next steps
Interested stakeholders should provide feedback on or before 10 June 2025 via the European Commission portal.
We expect that the feedback provided will inform the legislative proposals relevant to the EU asset management sector which are due to be published by the European Commission in Quarter 4 of this year.
Footnotes
1. For a detailed overview of the Communication, please refer to our briefing on the topic.
2. The Consultation does not address the eligibility of certain asset classes for UCITS funds as this is currently being considered by ESMA as part of its review on the UCITS Eligible Assets Directive.
Originally published 17 April 2025
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