EU markets integration package: UCITS, AIFMD, MiFID II
19 January 2026
Package for the complete integration of EU financial markets: amendments to the UCITS Directive, AIFMD and MiFID II – with consolidated PDF
UCITS
The amendments proposed by this Directive aim to reduce regulatory fragmentation within the EU asset management market, enhance operational efficiency by lowering compliance burdens and facilitating cross-border scalability, and strengthen investor protection through more consistent supervision and a reduction in regulatory arbitrage. In particular, the following changes are introduced:
Removal of Barriers to Cross-Border Fund Management
The amendments aim to eliminate remaining regulatory and operational barriers to cross-border management of UCITS. National discretions and divergent supervisory practices are reduced to facilitate the efficient provision of fund management services across Member States and to strengthen the single market for asset management.
Harmonisation of Authorisation and Supervisory Procedures
The proposal further harmonises authorisation processes and supervisory requirements applicable to UCITS management companies. Procedural clarifications and standardised information requirements are introduced to enhance transparency, consistency and predictability in interactions with competent authorities, thereby supporting supervisory convergence across the Union.
Clarification of Delegation and Substance Requirements
The amendments clarify the conditions under which management companies may delegate functions within the EU, particularly within asset management groups. They reinforce the principle that delegation must not undermine effective supervision or investor protection, while avoiding disproportionate substance requirements that could hinder cross-border operating models.
Introduction of an EU Depositary Passport
An EU-wide depositary passport is introduced, allowing UCITS to appoint a depositary located in another Member State. This measure enhances competition among depositaries, reduces costs, improves service availability in smaller markets and contributes to greater integration of post-trade and custody services within the EU.
Reduction of National Discretions and Gold-Plating
Several national options and discretions under the UCITS framework are removed or narrowed. This limits gold-plating, reduces legal uncertainty for cross-border fund structures and ensures a more level playing field for UCITS management companies operating in multiple jurisdictions.
Simplification of Disclosure and Reporting Obligations
Disclosure and reporting requirements are streamlined, particularly for management companies managing both UCITS and AIFs. The amendments aim to reduce duplicative reporting, lower administrative burdens and improve the efficiency of supervisory oversight without weakening investor information standards.
Enhanced Supervisory Convergence and ESMA’s Role
The proposal strengthens supervisory convergence by enhancing ESMA’s coordinating role, including in areas such as delegation arrangements, cross-border supervision and risk monitoring. This supports consistent application of the UCITS framework and mitigates supervisory fragmentation across Member States.
Contribution to Capital Markets Union Objectives
Overall, the amendments modernise the UCITS framework to better support cross-border asset management, economies of scale and operational efficiency, while preserving high standards of investor protection. They form a key pillar of the broader Capital Markets Union agenda and aim to reinforce the global competitiveness of EU funds.
AIFMD
The amendments proposed by this Directive aim to reduce regulatory fragmentation within the EU asset management market, enhance operational efficiency by lowering compliance burdens and facilitating cross-border scalability, and strengthen investor protection through more consistent supervision and a reduction in regulatory arbitrage. In particular, the following changes are introduced:
Removal of Barriers to Cross-Border Asset Management
The amendments seek to remove remaining legal and operational barriers that hinder the cross-border management and marketing of alternative investment funds within the Union. By reducing national divergences and aligning supervisory practices, the proposal facilitates more efficient cross-border activity and supports deeper integration of EU asset management markets.
Harmonisation of Authorisation and Supervisory Procedures
Authorisation processes and ongoing supervisory requirements applicable to AIFMs are further harmonised. Standardised procedural rules and clearer information requirements are introduced to enhance legal certainty, reduce administrative friction and promote consistent supervisory outcomes across Member States.
Clarification and Streamlining of Delegation Frameworks
The proposal clarifies the conditions governing delegation arrangements, particularly within EU-based asset management groups. It reinforces effective oversight and accountability while avoiding excessive substance requirements that could undermine efficient group structures. The amendments aim to strike a balanced approach between investor protection, supervisory effectiveness and operational flexibility.
Introduction of an EU Depositary Passport
An EU-wide depositary passport is introduced for AIFs, allowing AIFMs to appoint a depositary established in another Member State. This measure enhances competition in depositary services, improves access to specialised providers, reduces costs and contributes to greater integration of custody and post-trade services across the EU.
Reduction of National Discretions and Gold-Plating
Several national options and discretions under the AIFMD framework are removed or narrowed. This limits gold-plating, reduces compliance complexity for cross-border AIFMs and ensures a more level playing field for alternative fund managers operating in multiple jurisdictions.
Simplification of Reporting and Disclosure Requirements
The amendments streamline reporting and disclosure obligations, particularly for AIFMs managing both AIFs and UCITS. Duplication is reduced, reporting processes are simplified and supervisory data collection is made more efficient, while maintaining appropriate transparency for investors and competent authorities.
Strengthening Supervisory Convergence and ESMA’s Role
The proposal enhances supervisory convergence by strengthening ESMA’s coordinating and convergence tools, including in relation to delegation, cross-border supervision and enforcement practices. This addresses fragmentation in supervisory approaches and supports consistent application of the AIFMD across the Union.
Contribution to Capital Markets Union Objectives
Overall, the amendments modernise the AIFMD framework to support scale, efficiency and cross-border growth in alternative asset management, while preserving high standards of investor protection and financial stability. They form an integral part of the Capital Markets Union agenda and aim to reinforce the global competitiveness of EU alternative investment funds.
MiFID II
The amendments proposed by this Directive aim to reduce regulatory fragmentation within the EU asset management market, enhance operational efficiency by lowering compliance burdens and facilitating cross-border scalability, and strengthen investor protection through more consistent supervision and a reduction in regulatory arbitrage. In particular, the following changes are introduced:
Further Harmonisation of Trading Venue Rules
The amendments further harmonise the regulatory framework applicable to trading venues by transferring remaining operational and organisational requirements from MiFID II into directly applicable EU legislation. This aims to reduce national divergences, ensure consistent application across Member States and facilitate cross-border provision of trading services, thereby strengthening the single rulebook for EU capital markets.
Streamlining of Market Access and Infrastructure Rules
Duplicative and outdated provisions relating to market infrastructure access, including certain rules overlapping with EMIR and CSDR, are removed. The amendments simplify access conditions for trading venues, central counterparties and central securities depositories, reducing compliance complexity and operational frictions without lowering prudential or investor protection standards.
Removal of Redundant Provisions Following Legislative Transfers
Provisions that became redundant following the transfer of the trading obligation and transparency requirements to Regulation (EU) No 600/2014 (MiFIR) are formally deleted from MiFID II. This enhances legal clarity and avoids parallel or overlapping regulatory obligations for market participants.
Clarification of the Scope of Investment Services
The amendments clarify the scope of MiFID II by expressly excluding activities already comprehensively regulated under other EU financial services legislation. This contributes to legal certainty, reduces interpretative inconsistencies at national level and limits gold-plating risks.
Facilitation of Cross-Border Provision of Services
By simplifying organisational and operational requirements applicable to trading venues and investment firms, the amendments lower barriers to cross-border market access. This supports greater market integration, enhances competition among trading venues and contributes to deeper and more liquid EU capital markets.
Enhanced Supervisory Convergence
The changes support increased supervisory convergence by aligning national implementation practices and reinforcing the role of EU-level supervision, in particular through ESMA’s coordination and convergence tools. This addresses fragmentation in supervisory approaches and promotes consistent enforcement across Member States.
Contribution to Capital Markets Union Objectives
Overall, the amendments to MiFID II are designed to reduce regulatory fragmentation, improve market efficiency and support innovation, while maintaining high levels of market integrity and investor protection. They form an integral part of the broader Capital Markets Union agenda and aim to enhance the global competitiveness of EU financial markets
