Asset Management & Investment Funds: EU & International Developments – June 2026

IOSCO Final Report on valuing collective investment schemes

IOSCO published its final report on valuing collective investment schemes (CIS) setting out updated recommendations to enhance the reliability, consistency and transparency of valuation practices across global investment funds.

The report updates and consolidates its 2007 Hedge Fund Principles and 2013 CIS Principles into 13 recommendations on CIS valuation practices applying broadly to registered/authorised public open-ended funds (including ETFs but excluding MMFs). Key areas include:

• valuation policies and procedures, governance, and oversight arrangements, including governance under stressed market conditions
• management of conflicts of interest
• fair value methodology, including back testing and calibration
• price overrides policies and procedures and oversight
• periodic (at least annual) review of valuation policies and procedures
• enhanced due diligence requirements for third-party valuation service providers
• processes relating to valuation consistency, pricing errors and timely valuation
• new recommendation on record keeping

The recommendations reflect increased CIS exposure to less liquid and private assets and lessons from recent market stress episodes. For closed-ended funds and other funds outside scope, the recommendations may serve as good practices.

AMLA consultation on draft guidelines on ongoing monitoring of business relationships under the AML Regulation

The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published a consultation paper on draft guidelines on ongoing monitoring of business relationships under Article 26(5) of Regulation (EU) 2024/1624 (the AML Regulation or AMLR).

Article 26 requires obliged entities to conduct customer due diligence (CDD) reviews periodically and on an ongoing basis to identify relevant changes in customer information. Article 26(5) mandates AMLA to issue guidelines on ongoing monitoring of business relationships and related transactions and activities.

Key elements of the draft guidelines include:

• Customer documents, data and information must be kept up to date, through periodic and event-driven reviews. The draft outlines sources of information that may be used to update CDD information and examples of information that obliged entities should consider and assess during periodic customer information reviews, and event-trigger reviews.
• How obliged entities should design, implement and test monitoring frameworks to detect unusual or suspicious transactions and activities. It sets out proportionate approaches, including the use of manual, automated or semi-automated processes and controls and, where appropriate, advanced analytical tools. It also establishes expectations for the effective assessment and escalation of monitoring outputs and reinforces the importance of integration of monitoring with CDD to support a holistic and up-to-date understanding of customer behaviour.

AMLA emphasises proportionality, cross‑sectoral applicability and sound business‑wide risk assessment as the basis for effective ongoing monitoring. The draft also highlights the need for clear governance, adequate documentation, appropriate staff training, and the responsible use of advanced analytical tools, supported by effective human oversight, where needed.

The deadline for responses is 3 September 2026 with final guidelines expected in Q4 2026.

ECON draft reports on Market Integration and Supervision Package

The European Commission's Market Integration and Supervision Package (MISP), a central pillar of the EU's Savings and Investments Union strategy, moved into the European Parliament’s amendment phase in June 2026 following publication of draft reports by the European Parliament’s ECON Committee:

• Draft report on the proposed Regulation on the further development of capital market integration and supervision (MISP Regulation).
• Draft report on the proposed Directive on the further development of capital market integration and supervision (MISP Directive).
• Draft report on the proposed Regulation on settlement finality.

Ireland assumed the Council Presidency from Cyprus with strong political backing to advance the package.

ECON members may table further amendments by 16 July 2026, and ECON is expected to vote on its negotiating position in early December 2026.

Read our earlier publication here.

ESMA speech on priorities for the European asset management sector

On 12 June 2026, ESMA Chair Verena Ross addressed EFAMA's Annual General Meeting, setting out four strategic priorities for the European asset management sector:

• Streamlining funds reporting, including its final report on integrated data collection which envisages a single EU reporting template to replace fragmented national and EU obligations, with initial implementation under AIFMD and the UCITS Directive. A consultation on draft technical standards is expected by end-2026, with final proposals in H1 2027.
• The potential of distributed ledger technology (DLT) and fund tokenisation to enhance operational efficiency and distribution while emphasising the need for legal certainty, interoperability and robust investor protection.
• That markets have remained broadly resilient despite geopolitical tensions and tighter financial conditions but cautioned that vulnerabilities persist, highlighting valuation pressures, leverage, liquidity management and the growth of private credit as continuing supervisory focus areas.
• Its support for the Retail Investment Strategy and the Savings and Investments Union, with a focus on simplifying disclosures (including PRIIPs KIDs) and improving cost transparency to enhance investor outcomes.

ESMA supervisory priorities

ESMA published its annual letter on the prioritisation of deliverables under its 2026 Annual Work Programme. ESMA has identified a number of planned policy deliverables, including certain AIFMD/UCITSD guidelines that will be postponed or deprioritised, primarily due to potential overlap with the MISP proposal and the broader simplification and burden reduction agenda.

Resources freed up from these deferrals will be redirected to ESMA's highest priority workstreams for 2026. These include preparation for the supervision and authorisation of consolidated tape providers and ESG rating providers, T+1 settlement preparation, targeted convergence actions to support effective MiCA implementation, assessing the impact of tokenisation and monitoring risks arising from geopolitical instability, EMIR 3 implementation, delivery of Phase 1 of the European Single Access Point (ESAP) and preliminary work on new legislative files such as the Retail Investment Strategy.

MiFID II - research unbundling changes apply

From 6 June 2026, amendments under the EU Listing Act permit the re‑bundling of research and execution payments for certain market capitalisation segments, reversing aspects of the MiFID II inducements regime. Asset managers and MiFID firms should assess their research procurement arrangements and related disclosure obligations in light of these changes.

EU transition to T+1 settlement - ESMA consultation

ESMA has opened a consultation on proposed revisions to post‑trade guidelines under CSDR as part of preparations for the EU’s move to a T+1 settlement cycle. The changes are intended to promote more efficient and consistent allocation and confirmation processes, including greater reliance on structured electronic messaging. The EU’s move to T+1 will take effect on 11 October 2027.

Stakeholders are invited to submit feedback by 7 July and ESMA expects to publish the final report and updated guidelines by October 2026.

Council of the EU agrees SFDR 2.0 negotiating position

The Council of the EU has agreed its negotiating position on the proposed SFDR 2.0 proposals. Key amendments that it is seeking to introduce to the European Commission’s proposals include:

• For the proposed sustainable and transition categories, when companies identify and disclose the principal adverse impacts of their investments on sustainability factors, they must make mandatory use of at least three indicators from a list to be provided by the European Commission to support their claims, which should allow for better comparability between financial products.
• Investments in companies active in the fossil fuel sector that allocate 20% of their capital expenditure to economic activities aligned with EU taxonomy rules, and with a strategy to reduce greenhouse gas emissions, may be considered for inclusion in the transition category, subject to a fourth mandatory indicator when assessing adverse impacts.
• The Council's position includes provision for the inclusion of general-purpose issuances by public sector bodies in the transition category when certain conditions are met.
• The disapplication of the categorisation provisions for AIFs offered exclusively to professional investors.
• A maximum phase in period of three years for a product to reach the 70% threshold (without prejudice to any shorter or longer periods under applicable Union sectoral legislation), designed in particular to accommodate ramp up time for alternative and private asset strategies.

The agreement on the negotiating mandate allows the Presidency of the Council to start trilogue negotiations with the European Parliament once the Parliament agrees its own position.

The European Parliament has also begun to shape its position, with the rapporteur in the Economic and Monetary Affairs (ECON) Committee publishing a draft report in late April 2026 with amendments to the draft report having been published in June 2026, setting out proposed amendments to the Commission’s SFDR 2.0 proposal. This draft reflects the Parliament’s initial negotiating stance, but it has not yet been formally adopted. In particular, the draft report must still be approved by the ECON Committee and subsequently adopted in plenary before it becomes the Parliament’s formal negotiating mandate.

The European Parliament broadly supports the Commission's three-category product regime ("sustainable", "transition" and "ESG basics"), proposing enhancements on transparency, effectiveness and burden relief. On transparency, the rapporteur would make principal adverse impact (PAI) indicators mandatory for categorised products, require non-categorised products to carry a disclaimer that they do not meet EU sustainable-finance standards, and require pre-contractual disclosures to be suitable for retail investors. On effectiveness, ESG basics products must outperform after eliminating at least the lowest rated 20%, the CTB/PAB safe harbours would be removed and the taxonomy safe harbour raised from 15% to 20%, already met by 44.1% of current Article 9 funds. On burden relief, entity-level reporting relief would apply immediately, with a 24-month transition period for other provisions.

Next steps

Subject to the Parliament agreeing its position (expected later in 2026), trilogue negotiations between the Council, Parliament and Commission will commence, with a view to reaching political agreement on the final text of SFDR 2.0.

For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.

Date published: 2 July 2026