Summary

  • The Council would transfer direct supervision of defined major cross-border venues and post-trading firms to ESMA, with ESMA responsible for final decisions after a two-year transition.
  • A new executive board would make entity-specific decisions while ESMA’s board of supervisors retains system-wide regulatory, strategy and budget roles; the lawmaking process remains open.

ESMA’s 7 October statement on third-country central securities depositories (CSDs) addressed a deadline before institutional design. A transitional regime is due to end on 17 January 2027, so ESMA said market participants should not be prevented from using certain services while the EU completes an extension. Two days later, the Council of the European Union agreed key elements of a package that would change who supervises some of the market infrastructure behind those services.

The Market Integration and Supervision Package (MISP) is not yet law. The 9 October political agreement sets out key elements of the Council’s negotiating position; the text still has to be finalised before formal adoption. The European Parliament’s procedure file listed the proposal as awaiting a committee decision. Negotiations can begin once Parliament adopts its own position.

The Council’s approach would transfer supervision of the most significant cross-border trading venues and post-trading entities, including CSDs and central counterparties (CCPs), from national authorities to ESMA. This is a bounded transfer, not a plan to place every exchange or financial firm under one EU supervisor. The Council says it refined the significance criteria, but its release gives no numerical thresholds or estimate of qualifying operators. It proposes that the Commission review trading-venue criteria after two years.

A new full-time ESMA executive board—one chair and five independent members—would manage operations and make entity-specific decisions for directly supervised operators. A separate board of supervisors would remain ESMA’s principal body for regulatory decisions, strategy, budget and supervisory convergence. The proposal therefore divides entity-level cases from system-wide regulatory choices; the new executive body does not replace the board of supervisors.

The handoff would take two years. ESMA-led teams of EU and national experts would transfer supervisory tasks together. Flexible, continuing cooperation would preserve national expertise afterward, while ESMA would hold responsibility for final assessments and decisions. This transition is separate from the proposed review of trading-venue criteria after two years.

The Council also describes routes that limit or shape the transfer. A voluntary pan-European market operator (PEMO) could operate several venues across the EU under one licence and direct ESMA supervision, even if it does not meet the usual significance criteria. Only the most significant cross-border crypto-asset service providers would enter immediate ESMA supervision, rather than all providers in the Commission’s original proposal.

The governance test is whether the final thresholds, the two boards’ decision boundaries and the permanent cooperation model make clear who investigates, who decides and how local expertise reaches the decision-maker. The October agreement points toward one final supervisor for entities inside a defined perimeter, but remains a negotiating position. ESMA’s CSD statement shows why operational arrangements may need continuity while legislation is unfinished; it does not show that MISP has taken effect.

Sources

  1. Council MISP agreement, 9 October 2026
  2. European Parliament procedure 2025/0383(COD)
  3. European Commission MISP package
  4. Commission communication COM(2025) 940 on the Savings and Investments Union
  5. Commission proposal COM(2025) 943
  6. ESMA statement on third-country CSD access, 7 October 2026
  7. Council background on the Savings and Investments Union
  8. Irish Presidency results of the 9 October Finance Ministers’ meeting
  9. ECOFIN meeting page, 9 October 2026