FESE’s position on the Market Integration & Supervision Package (MISP)

The Federation of European Securities Exchanges (FESE) welcomes the European Commission’s Market Integration & Supervision Package (MISP) as a timely and important initiative to strive to strengthen the efficiency, resilience and competitiveness of EU capital markets. Building on FESE’s long-standing commitment to fair, transparent and well‑functioning markets, this package represents a key opportunity to remove long‑standing barriers to cross‑border activity, modernise regulatory frameworks, and ensure that Europe’s capital markets infrastructure remains strong, future‑proof and globally attractive.

Europe faces a pivotal moment. Against a backdrop of intensifying geopolitical headwinds, the EU must strengthen its economic sovereignty by unlocking growth, deepening capital markets, and reducing fragmentation that undermines efficient price formation.

FESE’s key messages across three core policy areas are covered in our position: Trading, Distributed Ledger Technology (DLT), and Supervision. They reflects FESE’s positive, forward‑looking approach while highlighting essential considerations to ensure the package delivers on its objectives.

1. Trading – Strengthening market structure and supporting a competitive listing ecosystem

FESE supports the Commission’s ambition to remove cross-border barriers in order to enhance efficiencies across the Union and advance market integration.

However, to attract, support, and retain Europe’s most innovative companies, the EU needs deeper, more liquid, and more transparent secondary markets that reinforce price formation, enhance investor confidence, and support vibrant primary markets.
 

Key messages

• Equity market structure reform is essential, but is missing in the MISP: Meaningful reforms must tackle the long-standing challenges linked to liquidity fragmentation, regulatory asymmetries, and the growth of bilateral trading. FESE encourages policymakers to prioritise measures that strengthen visible, multilateral liquidity as the foundation of trust, market efficiency, and the EU listing ecosystem, while ensuring a level playing field across execution mechanisms.
• Maintain the Consolidated Tape as already agreed: Revisiting the scope of the equity CT at this stage is premature. Any changes should be supported by a robust impact assessment grounded in actual data following its implementation and be accompanied by appropriate safeguards and a broader reassessment of the Level 1 equilibrium.
• Remove unnecessary friction to cross-border activity: FESE welcomes the Commission’s proposals to facilitate cross-border activity and calls for focused refinements to avoid unintended challenges in implementation and operational complexity.

2. DLT & Innovation – Modernising frameworks to enable responsible innovation

FESE welcomes the Commission’s ambition to support digital innovation and integrate DLT‑based models into the EU rulebook. Exchanges have long been pioneers of safe technological progress and stand ready to support a modern, competitive and innovation‑friendly regulatory environment.
 

Key messages

• Modernise standard regulatory frameworks: to fully harness the potential of DLT and tokenisation, the EU should also prioritise updating CSDR, EMIR, and MiFID/MiFIR to reflect the specific features of DLT. Without such changes, innovation risks shifting to less transparent OTC channels.
• Ensure a coherent update of the DLT Pilot Regime: FESE supports targeted amendments to improve the scalability of DLT while ensuring strong investor protection and a level playing field for participants outside the pilot. Clear transitional pathways into the standard regulatory frameworks should be provided, contributing to predictability for DLTPR participants and supporting the experimental purpose of the regime.

3. Supervision – Enhancing convergence while preserving efficiency and proportionality

FESE stands with the Commission’s ambition to tackle fragmented supervisory outcomes under the single rulebook. The landscape of European market operators is diverse. They have varying corporate structures, activities, instruments and levels of economic and cross-border significance.

Regardless of the supervisory model, the framework should remain clear, agile and well‑calibrated, prioritising simplicity, efficiency and a level playing field. Any changes should deliver coherence and consistent supervisory outcomes across trading venues while avoiding new complications through dual supervisory layers.
 

Key messages

• Avoid duplicative supervision: Harmonised practices across the EU and the avoidance of costly, overlapping layers of supervision should be the guiding principle. A clear allocation of responsibilities between ESMA and NCAs is essential, along with avoiding repetitive information requests.
• Ensure cost‑effective supervision: Supervisory reforms should avoid double fees for the same regulatory obligations and ensure that any fee adjustments are closely linked to clearly defined supervisory needs.
• Strengthen legal protections: Any potential transfer of supervisory powers must be accompanied by robust procedural safeguards, including clarity on intervention powers, effective appeal rights and well-defined multi-stage procedures.