9 August 2025

EU, UK key regulatory updates

A) EU strategy latest

- Are there any barriers that could be addressed by turning certain provisions of AIFMD, MiFID and UCITS into a Regulation?

- Would the PRIIPs KID benefit from being streamlined and simplified?

- What aspects of the cross-border distribution of funds framework have created obstacles to the marketing of investment funds?

- What would be the costs (one off, ongoing) and savings for your organisation associated with new direct EU-level supervisory mandates?

Sample questions: ‘Targeted consultation on integration of EU capital markets’ [April – June 2025]

1. EC consult on ‘obstacles’ facing EU capital market integration

The European Commission (EC) recently held a pivotal, far-reaching industry dialogue, in their quest to create “a financing ecosystem that will allow Europe to reach its full economic potential”. The objective was to gather stakeholder feedback on obstacles to financial market integration across the EU. This was a key part of their Savings and Investments Union (SIU) strategy (declared in March this year).

a) Consultation structure, key proposals

The EC’s 93-page consultation document invited feedback on issues and possible measures concerning:

General barriers linked to the integration and modernisation of trading and post-trading infrastructures, the distribution of funds across the EU, and efficient cross-border operations of asset management;
Specific barriers linked to EU supervision.

Stakeholders were asked to provide “views, facts, and evidence” in response to over 400 questions (spread across seven sections), highlighting areas where EU laws could be simplified.

- 1) Simplification and burden reduction [p.5-7]: this section included initial questions on the AIFM, UCITS and MiFID Directives, plus the EU-PRIIPs KID. Aside from the idea of turning “certain parts of EU Directives” into a Regulation, the EC pitched the idea of a simplified “interplay” between different EU regulatory frameworks.

- 2) Trading [p.8-23]: this section covered Regulated markets, Multilateral trading facilities (MTFs), Organised trading facilities (OTFs), plus Exchange Traded Funds (ETFs). It focussed on ‘vertical’ barriers pertaining to the modernisation of liquidity pools, alongside cross-border trading operations.

- 3) Post-trading [p.24-41]: this section invited views on ‘vertical’ barriers to cross-border settlement and the application of new technology and market practices, including questions on the Central Securities Depositories Regulation (CSDR) and use of distributed ledger technology (DLT).

- 4) Horizontal barriers to trading and post-trading infrastructures [p.42-52]: this referred to additional ‘horizontal’ barriers to trading / post-trading infrastructures, such as the European Post Trade Forum (EPTF), and ‘permissionless blockchains for enhancing financial services’ (i.e. not yet covered by DORA).

- 5) Asset management and funds [p.53-63]: here, the EC asked fund firms to cite obstacles they face across the single market. The idea of simplifying existing authorisation and passport systems is also floated.

- 6) Supervision [p.64-85]: this section queried the effectiveness of the current supervisory framework, including when applied to specific sectors (e.g. asset managers, crypto-asset service providers); the concept of “supervisory convergence” was also suggested.

- 7) Horizontal questions on the supervisory framework* [p.86-93]: finally, the EC raised the topic of granting ESMA new direct powers, within a new ‘EU-level supervisory and governance model’, including their use of new ‘convergence tools’ to deal with “ineffective local supervision”. The EC also suggested ‘transforming’ the EU Supervisory Authorities (ESAs) into ‘data and technology hubs’, within their market sector.

b) Next steps

The EC pledged “swift action” in order to “untap EU enormous potential and give it the means to secure its economic future”. Respondent views will now influence the shape of the EC’s “comprehensive package” of ‘legal’ and ‘non-legal’ measures, scheduled for Q4-2025 delivery; this will address three specific SIU ‘action’ areas:

‘Market Infrastructure Package’;
‘Improving cross-border provision of funds and reducing operational barriers facing asset managers’;
‘More integrated and efficient supervision’.

d) Key industry responses

All contributions to the EC’s consultation are now available to download and review (in two parts).

The European Fund & Asset Management Association: supplied an 114-page reply; they say the EC’s decision to focus on a simplified, proportionate EU capital market “is a move in the right direction”. However, they warn the EC to be “cautious in proposing bold and immediate actions without conclusive evidence this approach is the most effective way to achieve the desired outcomes.” EFAMA also point to the EU-PRIIPs KID as “excessively complex, even misleading in some cases”; they urge the EC to delete “complex, disproportionate elements” such as ‘implicit costs’ and ‘performance scenarios’, and ensure all retail products disclose only past performance (as per ‘UCITS IV’ framework), in due course.

The Investment Company Institute: rejected centralised supervision of the EU funds sector. Although citing “inconsistent national implementation of EU rules” and “national gold-plating”, the ICI prefer “enhanced coordination among NCAs, with a supporting role by ESMA” as the best way to reach supervisory convergence.

2. Retail Investment Strategy: EU discussions “now progressing”

The second EU ‘trilogue’ to discuss the Retail Investment Strategy (RIS) took place on 9 July.

There was gloom ahead of the first RIS meeting in March, given conflicting positions held by the EU Parliament [EP] and Council of the EU [CoEU]. The EC had said they would “not hesitate to withdraw” their original RIS proposals “if negotiations fail to meet the intended objectives”.

By contrast, the recent session was adjudged to be more productive, following the CoEU’s pledge to “advance RIS negotiations, while also giving priority to the simplification of these matters”.

Those close to the discussions say the EC have volunteered to provide a simpler, “concrete” version of their original ‘Value for Money’ proposals, within the next few weeks. Progress was also reported concerning future PRIIPs KID changes, with technical discussions expected to begin in the autumn.

The next trilogue (between the EC, CP and CoEU) is now expected to take place before the end of September.

B) Other EU updates

1. ESMA call for ‘retail investor journey’ evidence

Both the SIU and the RIS form the backdrop of a recent Call for Evidence (‘CfE’) on the ‘retail investor journey’.

This was held by the European Securities and Markets Authority (ESMA), who asked consumer groups and MiFID investment firms if certain EU disclosure, suitability and/or appropriateness rules “may create unintended obstacles for retail investors”. ESMA pointed to ‘key retail market trends’, including “the appeal of speculative products for younger investors” and the “influence of social media on investment decisions”.

Although primarily concerned with the current MiFID II regime, this consultation also covered PRIIPs KIDs and SFDR-related factors (e.g. sustainability preferences).

ESMA will now use feedback to assess “whether specific regulatory adjustments or clarifications may be needed”.

NB: both EFAMA and the Securities & Markets Stakeholder Group (SMSG) have released their responses to the CfE.

2. ESMA explore ideas on ‘integrated collection’ of UCITS/AIF data

ESMA also launched a consultation to assess the current supervisory reporting landscape in the asset manager sector. This follows their mandate (per 2024 ‘AIFMD II’ / ‘UCITS VI’ Directive) to inform the EC how to develop an ‘Integrated reporting system of supervisory data’, in order to “improve efficiency, consistency and effectiveness”.

a) Key proposals

At the core of ESMA’s Discussion Paper is a new, harmonised EU-level template for AIFMD and UCITS supervisory reporting, to enable better re-use of data by all regulatory authorities. This will replace the current “Annex IV reporting” framework, which has varied extensively across EU member states since 2014.

Moreover, ESMA also seek views on further extending their new EU template to administer:

Money Market Fund reporting, EU statistical information frameworks and local EU national reporting;
Transaction-level reporting (per EMIR/SFTR/MiFIR regimes).

ESMA also suggest firms could bypass local EU regulators entirely, by submitting their reporting data directly to an EU centralised system (to be developed by ESMA), i.e. akin to the ‘convergence tools’ now cited by the EC.

Other major proposals cover:

EU-level reporting frequency (monthly or quarterly);
Data granularity and use of master data* (e.g. security-level and share-class reporting, entity identification)
Reporting formats and systems (XML, XBRL or JSON).

*The European Single Access Point (ESAP) will be a “main source” of publicly-available disclosure data.

b) Next Steps

This discussion paper is open for comment until 21 September. A parallel call for evidence on how to streamline Transaction Reporting regimes (e.g. MiFIR, EMIR, SFTR regimes), falls within the same period.

ESMA’s final report on integrated collection of fund data is required before 16 April 2026.

3. Other recent ESMA activities

UCITS Q&As: these now clarify required updates of cross-border marketing notification letters.
UCITS eligibility technical advice: this contains proposals for a future ‘look-though approach’, ‘indirect exposure rules’, plus ways to improve retail investor access to EU-AIFs.
Principles on 3^rd party risk supervision: these aim to help both local regulators and supervised firms understand and manage third-party risks.
Final report on cloud service provider outsourcing: updated guidance, now excluding specific financial entities per UCITS and AIFMD regimes.
Guidance on unregulated crypto-products: this warns investors of a ‘halo effect’ when authorised crypto-asset service providers (CASP’s) dubiously offer unregulated products and/or services.

4. Other key EU updates

a) AFG may stop issuing ‘New PRIIPs’ Cost spreads”

Since 2018, the Association Française de la Gestion (AFG) have published a table of half–spreads used to calculate certain ‘implicit’ transaction costs (i.e. still required, per EU-PRIIPs and MiFID II disclosure regimes).

However, we understand the AFG may discontinue the issue of this information, from 2026. This would mean EU firms managing newer retail products may need to consider alternative sources. More to follow.

b) FinDatEx launch survey on European template usage

This week, FinDatEx began a survey to “better understand its templates’ usage and user base”. This is now open to all users of their industry templates (e.g. EPT, EMT, EET), until 26 September.

NB: Fund associations (e.g. EFAMA, ALFI and the UK-Investment Association) are now strongly encouraging their members to take part.

c) CSSF issue circular 25/894; update AIFMD FAQs

The Luxembourg funds regulator has published Circular 25/894, which states Information required from firms when they start to manage non-authorised UCITS and AIFs products. The CSSF also updated their AIFMD FAQs document.

d) ELTIFs: “game on” for Luxembourg, Ireland

The latest register of European long-term investment funds (ELTIFs) shows Luxembourg easily retaining pole position, with 132 funds now authorised. However, the Central Bank of Ireland’s “speedy” 24-hour authorisation of non-retail ELTIFs is now attracting significant market interest.

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C) UK strategy latest, etc

“The government aims to make the UK the most attractive place to manage investments, globally.”
UK Government ‘Financial Services Growth and Competitiveness Strategy’ [21 July 2025]

1. GovUK unveil Financial Services Growth and Competitiveness Strategy

Following in the footsteps of the EC’s ‘Competitiveness Compass’ and Savings & investments Union, the UK Government (GovUK) have now unveiled their local ‘Financial Services Growth and Competitiveness Strategy’.

The new UK strategy is summarised in an official overview, with many supplementary documents available for referral.

a) Core UK asset management objectives

In terms of asset management, there are now three core GovUK objectives:

‘Place portfolio management at the heart of policymaking’: they will “proactively review areas where regulation puts the UK at a competitive disadvantage compared to other jurisdictions”; they will seek “strong cross-border relationships to ensure existing offshore delegation models continue to work effectively”.
‘Make the UK a world leader for managing private markets assets’: they will “leverage the UK’s position as a leading venture capital and private equity centre”; this includes streamlining the local Alternative Investment Fund Managers (AIFM) laws, with the next phase of work brought forward to early-2026.
‘Deliver a future-proofed regulatory regime for asset management and champion innovation’: they seek to “stay ahead of the rapid changes impacting the sector”, including changing demographics, shifting investor demands, tokenisation and use of artificial intelligence.

NB: the new GovUK Strategy document also contains a ‘Plan through to 2035‘ summary (p.63-64).

b) UK retail investment campaign

Another key part of this new UK strategy is the creation of a new local ‘retail investment campaign’.

This campaign is expected to run across several years, “with the aim of encouraging those who can, to become investors”. It will also focus “on the benefits of investing, rather than promoting a specific asset class, product or market”.

It will be formally launched in April 2026, when local Long-Term Asset Funds [LTAFs] will become available for investors to select within their ‘Stocks & Shares’ Individual Savings Accounts [ISAs].

NB: this new UK campaign is now supported by Barclays, HSBC, Lloyds, AJ Bell, Hargreaves Lansdown, Vanguard, St James’s Place, Schroders and the London Stock Exchange. Both the Financial Conduct Authority (FCA) and HM Treasury will advise, while the Investment Association will provide the secretariat.

2. Berne Financial Services Agreement: FCA invites UK/CH firms to step forward

The new UK Strategy mentions the Berne Financial Services Agreement (BFSA). This is the free trade agreement signed with the Swiss government, back in December 2023.

The UK Government recently laid down a draft statutory instrument, in order for this to apply from 1 January 2026.

It covers mutual recognition of each other’s regulatory frameworks, but only in certain areas of the financial sector.

The BFSA will enable UK insurance companies to supply wholesale insurance services into the Swiss market, while Swiss investment firms can supply their investment services to UK high net worth individuals, professional clients and eligible counterparties.

NCA authorisation will not be required (in either regime). One legal firm assumes that UK/CH firms can also delegate portfolio and risk management activities, to service providers in both countries.

The Financial Conduct Authority (FCA) recently invited both UK and Swiss firms to submit their interest in providing cross-border services, as part of the new BFSA.

NB: the UK explanatory memo states the BFSA does not extend to Collective Investment Schemes (CIS) or Alternative investment funds (AIFs). The existing National Private Placement Regime (NPPR) remains unchanged.

3. Other recent FCA activities

UK-CCI: the FCA’s second consultation on their new Consumer Composite Investment (CCI) disclosure framework ended on 28 May. Finalised rules and “adjusted” transition details will be issued in “late 2025”.
Targeted support proposals: the FCA’s consultation on a new regulatory proposition for ‘targeted support’ and ‘simplified advice’ in retail investments and pensions open until 29 August.
AI testing invite: financial services firms have until 20 August to apply for the FCA’s ‘AI Live Testing’ lab.