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Related areas
Amendment to EU Benchmarks Regulation
Regulation (EU) 2025/914 amending the EU Benchmarks Regulation (BMR) has been published in the Official Journal of the EU. The amending Regulation aims to reduce the regulatory burden on smaller EU benchmark administrators. It entered into force on 8 June with the amendments applying from 1 January 2026. The reduction in scope introduced by the amending Regulation will mean that only UCITS management companies, UCITS funds and AIFs that use critical or significant benchmarks (as defined), certain commodity benchmarks, EU climate transition benchmarks or EU Paris-aligned benchmarks will be subject to the benchmark user requirements of the BMR.
IOSCO report and guidance on liquidity risk management for collective investment schemes
The International Organization of Securities Commissions (IOSCO) published its Final Report for Revised Recommendations for liquidity risk management for collective investment schemes together with Guidance for open-ended funds to ensure effective implementation of these recommendations
The recommendations and guidance should be read together. The report includes 17 recommendations across six sections: CIS design process, stress testing, day-to-day liquidity management practices, governance, liquidity management tools and measures and disclosures to investors and authorities. This marks the culmination of the work undertaken by IOSCO to strengthen liquidity management and operationalise the FSB’s 2023 liquidity management recommendations.
IOSCO made amendments to the proposed recommendations. These include:
IOSCO expects securities regulators to actively promote the implementation of the revised liquidity recommendations in their respective jurisdictions. It will review progress by member jurisdictions in implementing the revised recommendations and the implementation guidance. The review process will begin with a stocktake, to be completed by the end of 2026, of the measures and practices adopted and planned by member jurisdictions. IOSCO will aim to co-ordinate this with the Financial Stability Board's (FSB) stocktake of the measures and practices adopted and planned to implement the revised FSB recommendations relating to liquidity in funds. The findings will feed into an assessment of whether implemented reforms have sufficiently addressed risks to financial stability, including whether to refine existing tools or develop additional tools for use by responsible entities across the relevant jurisdictions.
ESMA published draft regulatory technical standards and a final report on the guidelines on liquidity management tools for UCITS and AIFs on 15 April 2025.
ESMA principles on the supervision of third-party risks
The European Securities and Markets Authority (ESMA) has published non-binding principles on third-party risks supervision. The principles provide guidance to supervisory authorities to identify, assess and supervise the third-party risks of EU entities operating in securities markets. Existing regulatory frameworks that already impose specific requirements on the use of third-party service providers will prevail over the principles.
The 14 principles were developed to address the growing risks in the use of outsourcing, delegation or other types of third-party services by supervised firms. They provide a common supervisory basis to national competent authorities (NCAs) and ESMA.
ESMA will support the progressive implementation of the principles through supervisory discussions and case studies among NCAs.
ESMA discussion paper on how to simplify fund data reporting
ESMA launched a discussion paper to gather feedback on how to integrate funds reporting, aiming to reduce the burden for market participants. This arises from AIFMD and the UCITS Directive which mandate ESMA to submit a report to the European Commission by 16 April 2026, outlining the development of an integrated reporting system of supervisory data. The initiative recognises that fund reporting in the asset management sector is now subject to significant fragmentation due to the coexistence of several reporting regimes at national and European level, resulting in high compliance burdens.
ESMA will use this discussion paper to inform its decisions when developing the recommendations that will form the final report.
The discussion paper includes a preliminary stocktake of current reporting obligations at both EU and national level including under AIFMD, UCITS, SFTR, EMIR, MiFID, MMFR, DORA and ECB statistical reports. It assesses the overlaps, gaps and inconsistencies between the reporting frameworks. It outlines some options for streamlining the reporting obligations and processes.
This paper adds to ESMA’s simplification and burden reduction initiative, launched earlier this year, and it is directly contributing to the debate on how to simplify, harmonise and eliminate barriers to produce an effective burden reduction in the financial sector, while preserving the main objectives of financial stability, orderly markets and investor protection. As mandated by MiFIR, ESMA commenced work on the simplification of financial transaction reporting, which is subject to a call for evidence in parallel to this discussion paper. The work on integrated reporting under AIFMD and UCITS will take into account, where available, the outcome of the work on the financial transaction reporting.
ESMA’s actions mark a shift from technical sectorial amendments to an integrated approach in funds supervisory reporting, similar to the comprehensive approach to financial transaction reporting. The idea is to take a step back and review reporting in a more comprehensive manner rather than focusing on the incremental sectorial changes.
AIF exposures to commercial real estate
ESMA published data on exposures of AIFs to commercial real estate (CRE) markets in the EU as of 31 December 2024.The sample comprises AIFs pursuing solely a CRE strategy. AIFs managed by sub-threshold AIFMs registered at national level are not included.
At the end of 2024, 2213 AIFs were pursuing a CRE strategy of which 1931 were AIFs marketed and/or managed by authorised EU AIFMs with a net asset value of €531bn. In terms of geographical breakdown of the investments, 83% were EEA, leaving 17% as non-EEA.
Comparative figures to end 2022 were: 3022 AIFs were pursuing a CRE strategy of which 2675 were AIFs marketed and/or managed by authorised EU AIFMs (net asset value of €607bn). This sample included AIFs pursuing partially a CRE strategy. Data for 2023 was not released.
ESMA urges social media companies to tackle unauthorised financial ads
On 28 May 2025, ESMA published a press release announcing that it has written to a number of social media and platform companies encouraging them to tackle unauthorised financial advertisements.
The press release links to the individual letters sent to X, Meta, TikTok, Alphabet, Telegram, Snap, Amazon, Apple, Google and Reddit.
The letters are written on behalf of ESMA and the EU NCAs. They recognise that the increasing spread of online scams targeting retail investors poses a serious risk to both investors and society, with fraudulent actors exploiting digital platforms to advertise unlawful financial services. These activities often mislead consumers into engaging with businesses that lack proper authorisation, resulting in financial losses as well as a loss of trust in the financial sector.
ESMA and the NCAs want to collaborate with online platforms and digital service providers to mitigate the harm caused by unauthorised businesses promoting financial products and services through online tools and applications. They explain that this approach complements the initiative the IOSCO launched on 21 May 2025 highlighting the global nature of online harm linked to financial misconduct.
The recipient companies are encouraged to consider IOSCO's initiative alongside the request being made by ESMA and the NCAs. ESMA and the NCAs believe a co-ordinated, international approach is essential to safeguarding investors and maintaining trust in digital platforms. In addition, a focused EU approach is necessary to address EU-specific investor protection requirements.
ESMA and the NCAs note that certain platforms have already implemented measures to restrict financial advertisements to authorised entities in specific jurisdictions. The recipient companies are urged to take proactive steps to prevent the promotion of unauthorised financial services. The letters suggest this could be achieved by consulting the ESMA register on MiFID II investment firms to verify whether any business that wishes to promote on the recipient company's platform has been authorised to provide investment services by an NCA or is acting on behalf of an authorised firm.
The recipient companies are asked to confirm receipt of the letter and their availability to arrange a meeting to discuss this issue.
Social media influence is covered in ESMA's call for evidence on retail participation in capital markets.
ESMA newsletter
ESMA published its latest edition of the Spotlight on Markets Newsletter. This edition for April and May include reference to the Call for Evidence (CfE) related to the retail investor journey under MiFID II. This CfE seeks feedback from stakeholders to better understand how retail investors engage with investment services. The deadline is 21 July 2025.
AML/CFT
On 10 June 2025, the European Commission adopted a Delegated Regulation (C(2025) 3815) to amend the list of high-risk third countries with strategic AML/CFT deficiencies produced under Article 9(2) of the Fourth Money Laundering Directive ((EU) 2015/849).
The Delegated Regulation will amend the list of high-risk third countries by:
The Delegated Regulation will be submitted to the Council of the EU and the European Parliament for scrutiny and non-objection within a period of one month (which can be prolonged for another month). If neither objects it will enter into force 20 days after it is published in the Official Journal of the European Union.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.