The Cyprus Securities and Exchange Commission (CySEC) this week announced the launch of a targeted consultation by the European Commission on proposed transformative amendments to the regulation and supervision of the financial services sector.

The consultation, published on April 15, 2025, forms part of the European Union’s (EU) broader Savings and Investments Union (SIU) strategy, unveiled on March 19, 2025.

The European Commission aims to collect feedback from financial institutions and other market participants to better understand the obstacles hindering the full integration of EU capital markets.

CySEC is urging all interested parties to participate actively in the consultation to help shape a comprehensive view of the Union’s financial services markets and future regulatory framework.

The consultation spans a wide array of topics across seven core sections.

The first section addresses simplification and burden reduction, focusing on how the existing regulatory framework concerning trading, post-trade activities, and asset management could be simplified to reduce operational burdens.

The second section concentrates on trading, where the European Commission seeks feedback on potential measures to improve liquidity consolidation across trading venues.

It also looks at enhancing access to trading venues and market infrastructures, and improving the quality of execution.

In the area of post-trading, the European Commission highlights three main concerns: cross-border settlement barriers, obstacles to the adoption of new technologies and market practices, and issues arising from unharmonised or inefficient market practices.

It calls for concrete examples from stakeholders to better understand these barriers.

A further section on horizontal barriers to trading and post-trading infrastructures seeks insights into cross-border operational synergies between entities, the issuance of financial instruments, innovation, and the supervision of outsourcing arrangements.

It also examines the treatment of group structures, the functioning of the DLT Pilot Regime, and issues surrounding asset tokenisation.

The consultation also delves into asset management and funds, aiming to uncover barriers to accessing the single market.

It explores the challenges associated with cross-border fund management and seeks views on the effectiveness and potential simplification of the existing authorisation and passporting systems.

On supervision, the European Commission proposes the centralisation of supervision in specific cases.

It suggests transferring oversight of certain entities—such as central counterparties, central securities depositories, trading venues, asset managers, and crypto-asset service providers—from national authorities to the European Supervisory Authorities.

Finally, the section on horizontal questions regarding the supervisory framework seeks feedback on the governance models and direct supervisory mandates of the European Supervisory Authorities (ESMA, EBA, EIOPA, and AMLA).

It also looks at supervisory convergence tools and considers an enhanced role for the ESAs, including issues around their funding.

CySEC strongly encourages all interested parties to participate in the consultation process.

Responses can be submitted to the European Commission through an online questionnaire by June 10, 2025.

Entities regulated by CySEC are further encouraged to send a copy of their response to CySEC’s policy department at [email protected].