MISP after the October Council political agreement: selective European supervision and the remaining barriers to market integration

EU RegCORE Client Alert | Capital Markets Union + Savings and Investment Union

QuickTake

Financial services groups assessing the EU’s Market Integration and Supervision Package (MISP) now face a practical structuring question: how far could a European operating model replace the national licences, supervisory relationships and service arrangements on which their business currently relies? The October Council agreement supports selective European supervision and wider cross-border operation, while leaving important choices to firms and Member States. Its benefits will therefore need to be assessed entity by entity and service by service.

On 9 October 2026, the Council of the European Union (Council) agreed the key elements of its negotiating position. Its public account narrows the Commission’s proposed transfer of crypto-asset service providers (CASPs) to the European Securities and Markets Authority (ESMA), broadens access to the proposed pan-European market operator (PEMO) framework and makes the new depositary passport optional for Member States. The direction is selective centralisation accompanied by measures intended to make cross-border operation easier.

The legal position requires care. The Council’s announcement, updated on 12 October 2026, expressly leaves finalisation and formal adoption of its position ahead. The European Parliament (Parliament) has not adopted its negotiating position. The European Council’s call of 15–16 October 2026 for negotiations to conclude by the end of 2026 is a political objective, not an application date for firms.

For boards, legal functions and business leads, the immediate task may well be to identify which decisions depend on unresolved legislation. A business case for consolidating venues, appointing a cross-border depositary or scaling tokenised infrastructure would show separately the permissions needed, the supervisory allocation assumed and the national-law constraints that would remain. Existing compliance and supervisory engagement must continue while those assumptions are tested.

This Client Alert develops our earlier MISP analysis (see our Client Alert of 31 August 2026) and focuses on the implications for trading and post-trading businesses, asset managers, depositaries and digital-asset firms. The proposals discussed below are not enacted reforms; references to particular draft provisions identify their source and stage.