Citing ongoing fragmentation of the European single market in financial services, the European Commission has published a package of measures intended to support the objectives of the Savings and Investments Union (SIU) including “transferring direct supervisory competences over significant market infrastructures such as certain trading venues, Central Counterparties (CCPs), CSDs, and all Crypto-Asset Service Providers (CASPs) to the European Securities and Markets Authority (ESMA) and enhancing ESMA’s coordination role for the asset management sector.”
However this proposed boost to ESMA’s powers has not gone down well with the German fund industry, which notes the proposals also would lead the regulator to annually audit cross-border asset managers with a minimum of €300bn AUM.
Thomas Richter, CEO of BVI, the German Investment Funds Association, commented: “A centralisation of supervision would be inefficient and expensive. National supervisory authorities will not disappear. BaFin and other NCAs will still be needed to supervise local market participants and to monitor compliance with national rules.”
“We do not need another supervisory authority, but better cooperation. ESMA should expand its coordination role – for example, as a data hub for national supervisors or with a clear competition mandate to secure Europe’s attractiveness as a location. Above all, the EU should simplify regulation. The massive flood of regulations from Brussels is the real problem for the industry.”
The BVI represents members directly and indirectly managing the assets of 50 million people in 21 million households in Germany.
Maria Luís Albuquerque, commissioner for Financial Services and the Savings and Investments Union, commented on the proposals: “For too long, Europe has tolerated a level of fragmentation that holds back our economy. Today we are making a deliberate choice to change course. By building a real Single Financial Market, we will give people better opportunities to grow their wealth, and we unlock stronger financing for Europe’s priorities. Market integration is not a technical exercise – it is a political imperative for Europe’s prosperity and global relevance.”
Efama’s latest report has shown European assets under management rising to a record €33 trillion in 2024, and an estimated €34.4 trillion by September 2025, driven mainly by strong equity performance.
The report highlighted shifts reshaping the European landscape: an increase in retail participation, with retail investors now representing 32% of total AuM; a tilt toward equities due to double-digit stock-market gains; and the continued expansion of passive investing, fuelled by the rapid growth of index-tracking ETFs. Efama also noted that private market allocations have slowed, UK LDI strategies have contracted, and cost pressures, especially from technology, continue to challenge operating margins.
Efama’s senior economist, Thomas Tilley, commented: “Meanwhile, several structural trends continue to reshape the industry: the expanding role of investment funds versus mandates, growth in retail investors, deeper cross-border integration and the relentless rise of passive investing.”
Efama’s director general, Tanguy van de Werve added: “To sustain and accelerate this trend, Efama advocates three key enablers that will further increase retail participation: improved financial literacy, well-designed tax incentives, and a simpler investor journey. While the recent financial literacy strategy and savings and investment account blueprint from the European Commission are important steps forward, it is essential that the ongoing negotiations on the Retail Investment Strategy lead to a significant simplification of the current, overly complicated investor journey.”
