On 9 October, under the Irish Presidency, EU finance ministers agreed the key elements of the Council's negotiating position on MISP, the centrepiece of the Savings and Investments Union. Parts of the French press called it a "super-gendarme boursier européen". That description fits the direction of travel. It overstates what was actually agreed.
Why Brussels is pushing
The Council's framing is blunt. Around €10 trillion of EU household savings sits in low-yield bank deposits. On the Commission's figures, EU stock market capitalisation is 73% of GDP against 270% in the US, and EU investment funds are roughly five times smaller than US funds. "Europe has the savings. Now it's time to put them to work," said Simon Harris, Ireland's Tánaiste and Minister for Finance.
MISP has three parts: a regulation that brings key trading and post-trading infrastructure under EU-level supervision; a directive amending the rules on financial markets and asset management, including what the Council calls "a shift from host-country to home-country supervision"; and a new settlement finality regulation that replaces the current directive.
What was agreed
The Council's position moves supervision of the most significant cross-border entities from national authorities to ESMA:
- the most significant cross-border trading venues
- the most significant CCPs and CSDs
- only the most significant cross-border crypto-asset service providers, not all of them as the Commission had proposed
Venues below the thresholds can opt in to direct ESMA supervision through a new Pan-European Market Operator licence. A two-year transition follows, with joint teams from ESMA and the national authorities. A new full-time ESMA executive board (a chair plus five independent members) would take entity-specific decisions, while the Board of Supervisors, where national authorities sit, keeps rules, strategy and budget.
What was diluted
The result is closer to the banking union than to a single market regulator: central supervision for the systemic few and national supervision for everyone else. That was the price of agreement. According to Eunews, a broad group of member states, including Luxembourg, the Nordics, Italy and Poland, pushed for national safeguards, and Belgium abstained. The same report says the Commission regretted the loss of ambition and that the ECB shared concerns about scope and governance. Germany is reported to have secured a carve-out for parts of Deutsche Börse Group.
The part fund managers should read
The headlines are about exchanges and crypto. The asset-management chapter is where most managers will feel MISP:
- Home-country supervision. Supervision of cross-border fund activity moves from the host state towards the home regulator. In practice, the Commission proposed a single notification to the home regulator, an ESMA data hub, standardised marketing materials, narrower translation requirements, and an end to local-facility requirements for UCITS. The Council has confirmed the principle. Its detailed text is not yet public.
- Depositary passport. For the first time, a fund could appoint a depositary in another member state. The Council has made it optional for member states, so expect a patchwork at first.
- Intra-group simplification. EU groups of UCITS management companies and AIFMs would be able to share resources and functions without the full delegation framework.
- Direct ESMA supervision of large managers? Parliament's ECON draft reports go further than the Council, proposing direct ESMA supervision of significant asset-management groups and of depositaries. This will be one of the main fights in trilogue.
What this means for non-EU managers
As far as the published texts show, MISP does not touch the third-country regime. National private placement regimes stay national, with 27 sets of interpretations, filings and fee schedules.
That is the strategic point. MISP lowers the cost of marketing inside the passport: home-country supervision, one notification, no local agents, a portable depositary. Nothing comparable happens for NPPR. The gap between a passported EU structure and a country-by-country private placement strategy is likely to widen.
For a US, UK, Swiss, Gulf or Asian GP with a repeat European LP base, the question becomes sharper. Is NPPR still a bridge, or is it becoming a cul-de-sac? With every simplification inside the passport, the case for an EU AIFM, a third-party ManCo or a hosted platform improves.
Next steps
The Council's position gives the Presidency a mandate to negotiate once Parliament has adopted its own. Trilogues follow. The "One Europe, One Market" roadmap targets delivery by end-2027 at the latest, and application dates will come later still.
Bottom line: Europe has not created its SEC. It has created a supervisor for the systemic core and handed everyone else a cheaper passport. For non-EU managers, the real decision is the route into Europe, not who supervises the exchanges.
If you are weighing that route for your next fund, screen a mandate or schedule a consultation with our team.
Regulatory position as of 19 October 2026. Informational only, not legal advice.
Sources
- Council press release, 9 October 2026
- Council: EU market integration and efficient supervision
- Eunews, 9 October 2026
- Arthur Cox on the Commission proposal
- PwC Legal on the ECON draft reports
Image: Berlaymont building, Brussels (48105132383), Daniel, CC BY 2.0, via Wikimedia Commons.
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