European Commission Publishes Market Integration Package

• Published date: 11 December 2025
• Law Firm: Dillon Eustace
• Author: Mr Etain De Valera, Derbhil O'Riordan, 'ine McCarthy and Tara O'Callaghan

What has the European Commission published and why?

On 4 December 2025, the European Commission published its much-anticipated market integration package (Proposal).

The Proposal aims to remove existing barriers to single market integration, including both pergent interpretations of EU rules and the imposition of additional national rules by certain Member States.

The Proposal comprises of three legislative amendment proposals, namely:

• A directive which amends the UCITS Directive, AIFMD and the MiFID II Directive;
• A regulation which amends fourteen existing EU financial services regulations, including the Cross Border Distribution of Funds Regulation, EMIR and the ESMA Regulation; and
• A regulation which replaces the Settlement Finality Directive and amends the Financial Collateral Directive.

What are the key elements of the Proposal relevant to Irish management companies¹ and Irish domiciled funds?

The below table provides an overview of the key elements of the Proposal of most relevance to Irish management companies and Irish domiciled funds

Proposal	Overview of Proposal
To bring EU group companies outside of the scope of the UCITS/AIFMD delegation rules	Under the existing frameworks, any intra-group allocation of functions to other EU entities within a group is subject to the same stringent delegation rules as those applicable to third parties (such as due diligence, monitoring and resource assessments). The European Commission has proposed that such delegation rules should not be applied where reliance is placed on other EU authorised management companies, EU authorised investment firms or EU authorised credit institutions within the same group. The management company would however remain fully responsible for the functions carried out by entities within the EU group and must ensure that such reliance does not reduce them to mere "letter box" entities. This calibration of the delegation regime is intended to facilitate the sharing of group-wide resources and to avoid unnecessary duplication of resources across different EU entities within the EU group.
ESMA to conduct an annual review of large EU groups of management companies and AIFMs	The European Commission has not proposed that ESMA become the direct supervisor of either management companies or EU domiciled funds. Instead, it has proposed that ESMA should be required to carry out an annual review of the supervision of "large EU groups of management companies and AIFMs" by each of the...