MiFID Monitor Q4 2025

1 MiFID II

1.1 ESMA statement on amendments made by MiFIR II and MiFID III Directive

On 10 October 2025, ESMA published a statement relating to the application of certain provisions of MiFIR and the MiFID II Directive in light of amendments made under MiFIR II and the MiFID III Directive.

The statement provides practical guidance to firms on the following:

• Revised systematic internaliser (SI) regime;
• The new single volume cap mechanism under MiFIR;
• Application of amended provisions of MiFID II in relation to commodity derivatives and derivatives on emission allowances;
• Application of revised transparency rules for bonds, structured finance products, emission allowances and equity instruments introduced under MiFIR II.

Application of revised transparency rules for bonds, structured finance products, emission allowances and equity instruments introduced under MiFIR II.

ESMA has stated that market participants are still expected to comply with the provisions as amended, irrespective of any change in timing for the European Commission's adoption of delegated and implementing acts. The revised MiFID II provisions will apply when the relevant changes have been transposed into national law.

ESMA' s statement can be accessed here.

ESMA's announcement from 8 October can be accessed here.

ESMA's amended version of the manual can be accessed here.

1.2 The EBA and ESMA recommend targeted revisions to the investment firms' prudential framework

On 15 October 2025 the EBA and ESMA together published a report on technical advice to the European Commission on the investment firms prudential framework set out in the Investment Firms Regulation (EU) 2019/2033 (IFR) and Investment Firms Directive (EU) 2019/2034 (IFD).

The report makes 49 recommendations, including in relation to the following:

• Consistency of application – the authorities believe there is potential for a more consistent application across the EU in some aspects of the framework, specifically referring to the need for clarity in terms and definitions used for K-factor requirements and prudential consolidation.
• Proportionality and functioning – the authorities suggest increasing thresholds for firms to establish risk and remuneration committees and harmonising the methodologies for categorisation thresholds, thus improving the framework's functionality and ensuring that it is applied proportionately.
• Level playing field – the authorities recommend improvements which strive towards a level playing field among investment firms within the EU and those that compete on an international level with market participants.

Under Article 60 of the IFR and Article 66 of the IFD, the Commission is required to produce a report on the IFRIFD prudential framework, along with legislative proposals where appropriate, following consultation with the authorities. The Commission had made a formal call for advice to the authorities concerning the IFR and the IFD in February 2023.

The full technical advice can be accessed here.

The respective press releases from ESMA and the EBA can be found here and here.

1.3 Commission Implementing Regulation amending reporting and disclosure ITS under IFR

On 31 October 2025, Commission Implementing Regulation (EU) 2025/2159, which amends the ITS set out in Implementing Regulation (EU) 2021/2284 (Implementing Regulation) in respect of supervisory reporting and disclosures of investment firms, was published in the Official Journal of the European Union.

The Implementing Regulation relates to the Investment Firms Regulation 2019/2033 (IFR) and was published in December 2021. The revised reporting framework reflects changes introduced under the CRR III Regulation¹ . The proposed amendments are based on Implementing Regulation (EU) 2024/3117, published in January 2025, and contain no significant changes, meaning that the EBA have not consulted on the ITS.

The European Commission adopted the ITS on 27 October 2025 and they entered in force on 20 November 2025.

1.4 Delegated Regulations enabling creation of consolidated tape under MiFIR

On 3 November 2025, the following Delegated Regulations were published in the Official Journal of the European Union. These Regulations facilitate the creation of the consolidated tape (CT), a centralised database intended to improve overall price transparency across EU trading venues under MiFIR² :

• Commission Delegated Regulation (EU) 2025/1143 – this will supplement MiFIR in respect of regulatory technical standards (RTS) on the authorisation and organisational requirements for approved publication arrangements (APAs) and approved reporting mechanisms (ARMs), along with authorisation requirements for CT providers, and repealing Delegated Regulation (EU) 2017/571;
• Commission Implementing Regulation (EU) 2025/1155 – supplementing MiFIR in the respect of RTS which specify the input and output data of CTs, synchronisation of business clocks and the revenue redistribution by the CT provider for shares and exchange traded funds along with repealing Delegated Regulation (EU) 2017/574;
• Commission Delegated Regulation (EU) 2025/1156 – supplementing MiFIR in respect of RTS relating on the obligation to make market data available to the public on a reasonable commercial basis;
• Commission Implementing Regulation (EU) 2025/1157 – containing implementing technical standards (ITS) for the application of MiFIR with regard to standard forms, templates and procedures for the authorisation for APAs, ARMs and CT providers, and repealing Commission Implementing Regulation (EU) 2017/1110;
• Commission Delegated Regulation (EU) 2025/1246 – amending the RTS set out in Delegated Regulations (EU) 2017/583 and (EU) 2017/587 as regards transparency requirements for trading venues and investment firms for bonds, structured finance products, emission allowances and equity instruments.

These Delegated Regulations were adopted by the European Commission in June 2025 and entered into force on 23 November 2025.

1.5 European Commission adopts Delegated Regulation on equity transparency under MiFIR

On 24 November 2025, the European Commission adopted a Delegated Regulation³ , amending Delegated Regulation (EU) 2017/567.

Following a review, the amendments reflect changes to MiFIR⁴ , and the MiFID II Directive⁵ made by MiFIR II⁶ and MiFID III⁷ . An annex to the draft Delegated Regulation was also published.

The proposed amendments to Delegated Regulation (EU) 2017/567 include the following topics:

• What constitutes a liquid market for equity instruments;
• The obligation to provide market data on a "reasonable commercial basis";
• Definition of and disclosure for post-trade risk reduction; and
• For the purposes of obligations for systematic internalisers, the size specific to the financial instrument.

Both the Council of the EU and the European Parliament will scrutinise the draft Delegated Regulation. If there are no objections, the Delegated Regulation will enter into force on the third day after its publication within the Official Journal of the European Union.

The Delegated Regulation can be accessed here.

The Annex can be accessed here.

1.6 ESMA to launch Common Supervisory Action on MiFID II conflicts of interest requirements

On 2 December 2025, ESMA announced the launch of a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) to address conflicts of interest in the distribution of financial instruments.

This CSA will assess how firms comply with their MiFID II⁸ obligations to identify, prevent and manage conflicts of interest when providing investment products to retail clients.

The focus of the CSA will include:

• Potential impact of staff remuneration and inducements on what products are offered to investors;
• Role played by digital platforms in directing investors towards products, and if this serves their best interests; and
• Ways firms negotiate the balance between the needs of retail investors and generating their own profits, thereby avoiding conflicts.

ESMA expects the CSA to strengthen investor protection across the EU and assist with the consistent application of EU rules. The CSA will be carried out by ESMA and the NCAs in 2026.

The ESMA press release can be accessed here.

1.7 European Commission consults on MiFID II research services

On 4 December 2025, the European Commission published a consultation for a draft Commission Delegated Directive (Draft Directive) to amend the MiFID II Delegated Regulation regarding the conditions under which third-party execution and research services are provided to investment firms which in turn provide portfolio management or other investment or ancillary services.

The Draft Directive is pursuant to Directive (EU) 2024/2811 and part of the Listing Act package, which further amended MiFID II⁹ by offering greater flexibility to investment firms in how payment for execution services and research is arranged. The main objective of the Draft Directive is to ensure consistent application of the amendments across the EU and to promote research on companies.

The Draft Directive amends Article 13 of the MiFID II Delegated Directive, and includes:

• New rules allowing for joint or separate payments for investment research and execution services;
• Requirement for firms to inform clients about the way they pay for research and execution services;
• Related transparency requirements.

The deadline for responses to the consultation was 1 January 2026 and the Draft Directive will apply from 6 June 2026.

The consultation can be accessed here.

The Draft Directive can be accessed here.

1.8 ESMA finalises technical standards on derivatives transparency and the OTC derivatives tape

On 15 December 2025, ESMA published a final report on three sets of draft RTS in relation to transparency for derivatives, package orders and input and output data for the OTC derivatives consolidated tape under MiFIR.

The final draft RTS provided for within the report are as follows:

• Transparency requirements for derivatives – the RTS deal with the new MiFIR transparency regime for exchange traded derivatives and OTC derivatives
• Treatment of package orders- the report sets out final draft RTS on amendments made to reflect the new scope of derivatives and the liquidity determination
• Input and output data for OTC derivatives consolidated tape – the amendments are to reflect ESMA's new mandate to develop draft RTS which provide data quality requirements for prospective consolidated tape providers and data contributors which cover the OTC derivatives tape.

These final draft RTS were submitted to the European Commission, which has three months to decide whether to endorse them. Each of the draft Delegated Regulations state that they will apply from 1 March 2027.

The report can be accessed here.

The ESMA press release is available here.

2 EU SAVINGS & INVESTMENTS UNION

2.1 European Commission adopts legislative proposals on integration of EU capital markets

On 4 December 2025, the European Commission published a communication to the European Parliament, the European Council, the Council of the EU, the ECB, the European Economic and Social Committee (EESC) and the Committee of the Regions regarding further development of capital market integration and supervision within the EU under its savings and investment union (SIU) package.

The Commission also published the texts of legislative proposals it has adopted which contain certain reforms for EU capital market integration. The proposals are to amend the following Regulations:

• ESMA Regulation;
• EMIR;
• MiFIR;
• CSDR;
• SFTR;
• CCCPR;
• DLT Pilot Regime Regulation;
• MiCA;
• CRA Regulation;
• Benchmarks Regulation;
• Securitisation Regulation;
• Green Bond Regulation; and
• Regulation (EU) 2024/3005.

This proposal can be accessed here.

In addition, the package includes:

• a proposal for a Directive amending the UCITS Directive¹⁰, AIFMD¹¹ and the MiFID II Directive in respect to the further development of capital market integration and supervision within the Union. This proposal can be accessed here.
• a proposal for a Regulation on settlement finality and the repeal of the Settlement Finality Directive¹² and amending the Financial Collateral Arrangements Directive¹³ .

The Commission had previously consulted on its proposals for integration of EU capital markets in April 2025.

Further detail in respect to the package is available here.

3 DORA

3.1 European Supervisory Authorities designate critical ICT third-party providers under DORA

On 18 November 2025 the European Supervisory Authorities, which consists of the EBA, EIOPA and ESMA (ESAs), published a list of designated critical ICT third-party providers (CTPPs) under the Regulation on digital operational resilience for the financial sector (DORA), marking a significant step in the implementation of the DORA oversight framework.

Designated CTTPs play a key role within the financial ecosystem of the EU and provide a range of ICT services to a variety of financial entities. The methodology for the designation under DORA was as follows:

• ESAs collected data from the Registers of Information that are maintained by financial entities which outline their contractual arrangements for ICT services;
• ESAs conducted a criticality assessment in cooperation with Competent Authorities (CAs) across the EU in sectors such as banking, securities and markets and insurance and pensions. The assessment was also carried out pursuant to a set of criteria under DORA, requiring a complete evaluation of the systemic importance of providers, the role it plays in supporting critical or important functions for financial entities and the substitutability level of its services; and
• ICT third-party providers that were assessed as critical were formally notified and provided with the right to be heard by providing a reasoned statement. Final decisions were adopted following careful review of all relevant information in order to ensure the integrity of the process.

The full list of CTTPs designated by the ESAs can be accessed here.

The accompanying press release can be accessed here.

3.2 ESAs report on whether statutory auditors should be subject to DORA

On 17 December 2025, the ESAs published a joint report (dated 4 December 2025) to the European Commission which concluded that the scope of DORA should not extend to statutory auditors and audit firms.

The consultation between the Commission and the ESAs took place pursuant to the requirement set out in Article 58(3) of DORA. The resulting report from the ESAs came in response to a letter from the Commission, also published on 17 December 2025, requesting the review. This letter can be accessed here.

The ESAs reviewed the role played by statutory auditors and audit firms in the financial sector and greater economy and the regulatory framework which applies to them. The ESAs concluded that the inclusion under DORA would be unwarranted at this stage.

The joint report from the ESAs can be accessed here.

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Footnotes

1 CRR III Regulation ((EU) 2024/1623)

2 Markets in Financial Instruments Directive (2014/65/EU)

3 (C(2025) 7810 final)

4 Markets in Financial Instruments Regulation (EU) No. 600/2014

5 Markets in Financial Instruments Directive (2014/65/EU)

6 Markets in Financial Instruments Regulation (EU) 2024/791

7 Markets in Financial Instruments Directive (EU) 2024/790

8 Markets in Financial Instruments Directive (2014/65/EU)

9 Markets in Financial Instruments Directive (2014/65/EU)

10 UCITS Directive (2009/65/EC)

11 Alternative Investment Fund Managers Directive (2011/61/EU)

12 Settlement Finality Directive (98/26/EC) 13 Financial Collateral Arrangements Directive (2002/47/EC)

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