The Master Regulation is a central component of the Savings and Investments Union (SIU), the EU’s new capital market strategy. The document is extremely extensive, but the core message is clear: Europe should finally get a genuine, uniform capital market – and for this purpose, the supervisory and market infrastructure model will be radically standardised.
Europe is making a new attempt to fundamentally modernise its capital markets. Under the umbrella of the Savings and Investments Union (SIU), the EU Commission has been pursuing a plan since 2025 that focuses less on large symbols and more on functional improvements: less fragmentation, more scaling, more digital connectivity. The proposal for a Master Regulation that has now been submitted is the central building block of this project – a mammoth text that amends 14 existing EU regulations at the same time.
The SIU architecture rests on three pillars: integration, economies of scale and efficient oversight. This is exactly where Master Regulation comes in:
- Merging rules: fewer national divergences, more direct EU application.
- Centralize supervision: ESMA will become the hub for large exchanges, CCPs and CSDs.
- Technology enable: Tokenization, DLT, e-money settlement become connectable.
AIFMD and UCITS will remain untouched at their core, but their previous marketing chapters will be spun off and completely shifted to the CBDR (Cross-Border Distribution Regulation ). The draft explicitly imports Chapter XI of the UCITS Directive as well as Articles 30a, 31, 32 and 32a of the AIFM Directive into the CBDR. This is the first time that the EU is decoupling product law and distribution law – and making cross-border fund distribution directly European.
The numerous substantive reform points can be practically summarized in three changes :
Firstly, cross-border fund distribution is becoming more European – and simpler.
Pre-Approvals der Host-Länder entfallen, Passporting wird in den Zulassungsantrag integriert, ESMA führt eine zentrale Datenplattform. Das reduziert Kosten, Komplexität und Time-to-Market. Die EU neutralisiert damit das über Jahrzehnte gewachsene nationale Goldplating im Fondsvertrieb.
Secondly, market infrastructure and supervision will be restructured.
ESMA receives direct supervision of large CCPs, CSDs and trading venues. The new “Pan-European Market Operator” is the first model to be created in which several exchanges in different countries can be operated under a single license .
Thirdly, the capital market logic is becoming digital-capable.
The DLT pilot regime will be broader, more flexible and technology-neutral. Tokenized instruments and e-money settlement will become connectable. The CSDR will be modernized to enable digital issuance and tokenized fund shares in the regular market.
The step is also politically remarkable: the EU is saying goodbye to 27 variants of the same topic and is – finally – creating a coherent capital market operating system.
Official timetable:
The Master Regulation will come into force 20 days after publication , the most important innovations will apply after 12 months , more complex integration modules after 24 months. Some MiFIR components take effect even later after a 5-year phase.
Europe is thus rewinding the operating system of its capital markets. Not with a big bang, but with a deep structural operation that could make the internal market work for the first time as it has long existed in theory.
📌 Result
- This time, the EU is serious about the Capital Markets Union.
- The Master Regulation noticeably shifts supervision and market infrastructure to Europe.
- Harmonised rules, centralised supervision and digital infrastructure can be a game-changer.
- ESMA is becoming a key institution in the European capital market.
- Cross-border marketing and sales hurdles are drastically reduced.
- Tokenized fund units and digital issues will become connectable.
👉 For the brave, there is an innovation boost from scalability and speed.
👉 For those who are hesitant, the pressure to adapt is growing.
