Markets in Financial Instruments Regulation (MiFIR) and the accompanying Markets in Financial Instruments Directive (MiFID II) regulate the provision of investment services in a multitude of financial instruments at regulated trading venues, as well as in over-the-counter (OTC) trading. The legislative acts have fundamentally transformed the European securities market by expanding transparency provisions, strengthening the stability and integrity of financial market infrastructure, revising the markets’ microstructure (market making, algorithmic trading, requirements regarding the security mechanisms of trading venues and market participants, tick sizes) and aiming at improved quality and availability of market data.

However, in the implementation of the Regulation and the Directive, fragmentation of equity market structures has been observed against the background of the staggering number of registered execution venues in the EU which are subject to different regulatory requirements. Without establishing a level playing field and improving transparency and data quality, EU capital markets will not be able to benefit from a centrally consolidated overview of trading data which is a key objective within the legislation. In addition, the adequacy of open access provisions for exchange-traded derivatives is being questioned, taking into account that forcing the interconnectedness of systemically important financial market infrastructures in derivatives could pose threats to market integrity and stability, and hamper innovation and competition.

The Regulation and Directive have been in effect since July 2014, with the Directive provisions being transposed into national law Europe-wide by July 2017.

Following a public consultation in 2020, the European Commission proposed amendments to address some of the identified shortcomings. Due to the urgency of the COVID-19 pandemic and the need for a swift economic recovery response, the review was split into two phases. A "quick fix" package addressing a limited number of issues was implemented first. Subsequently, a broader review focusing on areas like a consolidated tape, payment for order flow restrictions, and new rules for commodity derivatives, was proposed in late 2021. This comprehensive set of amendments was formally adopted by the European Parliament and the Council in early 2024. The amendments include the introduction of an EU-wide consolidated tape for various asset classes, a ban on payment for order flow (with some exceptions and delayed application for specific countries), and measures aimed at improving investor protection, enhancing commodity markets, and fostering orderly trading conditions. Member States are required to transpose the Directive amendments into national law by September 29, 2025.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

One of the core goals of the Capital Markets Union (CMU) is to improve access to market based sources of financing for businesses regardless of their size. The Listing Act aims to cut red tape and make EU public capital markets more attractive for EU companies by making it easier for companies of all sizes, including small and medium businesses (SMBs), to list on European stock exchanges. This will help them grow and diversify their funding, which is particularly important for SMBs that rely excessively on bank loans.

The Listing Act includes amendments to the Prospectus Regulation, Market Abuse Regulation (MAR), and MiFIR/MiFID II, as well as a new Directive on Multiple-Vote-Share Structures (MVSS). The new regime narrows disclosure obligations and simplifies the prospectus regime by standardizing the format, language, and page limit across the EU. In doing so, it significantly improves the listing environment and structurally increases the attractiveness of going public, possibly paving the way for many startups to go public in European markets.

In November 2024, the final EU Listing Act was published in the Official Journal of the EU and consequently took effect on December 4, 2024. The necessary Level 2 regulatory acts are currently under consultation in close cooperation between ESMA and the Commission and are expected to be finalized, approved, and completed by 2026.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

The Financing for the Future Act aims to mobilize more private capital and to make Germany a more attractive destination for businesses. The Act focuses especially on new, innovative start-ups, but also targets other small and medium-sized businesses that account for a significant portion of the German economy. It aims to develop strong capital markets and mobilize financing for investments that need to play a crucial role in creating opportunities for growth-stage of companies.

The legislation enacted improved conditions for employee share ownership through new tax rules and easier access to capital markets through reducing the minimum capital required for an IPO. Importantly, the Financing for the Future Act pioneered in digitization of capital markets by adding electronic shares to the scope of permitted securities. This created a legal framework under which securities could be issued and transferred electronically, using a distributed ledger technology (DLT).

The adopted text of the legislation was published in the German Federal Law Gazette (Bundesgesetzblatt) and has been in force since 2023. Deutsche Börse Group supported the initiative and continues to support innovation in capital markets through active implementation and thought leadership.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

One of the EU Commission’s key objectives in the 2020 Capital Markets Union Action Plan was to make the EU a safer place for citizens to invest their savings, with the aim of channeling private funding into the economy and toward the green and digital transition. Some of the main obstacles to retail investor participation in capital markets are the lack of access to relevant, comparable, and easily understandable information, the spread of unilateral and inappropriate marketing strategies, and the absence of financial advice that meets the interests of retail investors. To address these issues, the EU Commission initiated a legislative proposal on May 24, 2023, aimed at enabling retail investors to make investment decisions that reflect their individual preferences and ensuring that they are adequately protected and treated fairly. This retail investor strategy introduces new requirements regarding disclosure regulations, the role of financial advisors, and marketing practices, and develops benchmarks to determine whether the recommended and distributed financial products offer a favorable cost-benefit ratio. This could significantly strengthen retail investors’ confidence, allowing them to invest safely in their future and fully benefit from the EU Capital Markets Union.

The EU retail investor strategy is in an advanced stage of the legislative process in 2025. The first trilogue took place on March 18, 2025, but did not yield concrete results. Since the announcement of the Savings and Investments Union (SIU) agenda, the political focus has been on simplifying regulations for retail investors, so all parties now want to ensure that the Retail Investment Strategy (RIS) is compatible with the SIU.

The package includes:

• A regulation amending the PRIIP Regulation
• An omnibus directive providing for amendments to several existing directives:
  • MiFID II
  • IDD (Insurance Distribution Directive)
  • Solvency II
  • UCITS Directive
  • AIFM Directive

The final version of the directive will be published after the trilogue negotiations are concluded. Implementation into national law is expected to begin in 2026.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

To strengthen the capital markets, the European Commission set out to establish a more effective supervisory framework for investment firms. The new regime entered into force in December 2019, recognizing the special role of investment firms in the overall functioning of the EU financial markets by simplifying the rules for investment firms and facilitating investment flows throughout the EU. The Investment Firms Regulation and Directive (IFR/D) are designed to ensure that key prudential requirements for investment firms are adequately set and that compliance with them is monitored.

For example, IFR/D introduces a classification scheme, divided into four categories, according to which capital requirements for investment firms are determined. The so-called “K-factors” are calculated for each individual firm, based on the various risks in the respective activities of the investment firm, which determine its classification and the final level of capital requirements. In addition, the regulation lays down the conditions under which investment firms located in non-EU countries may obtain market access to the European single market. At the same time, it strengthens the supervisory powers of the European Securities and Markets Authority (ESMA).
 
The European Commission has initiated a review of the IFR/IFD regime in 2024.

The aim is to assess: 

• How effective and proportionate the prudential regime is;
• Whether adjustments are necessary, e.g. to thresholds for classification as systemically important companies;
• How ESG risks can be better integrated.

To this end, EBA and ESMA published a call for advice on the discussion paper on the potential review of the investment firms’ prudential framework. Following their report, a possible legislative proposal to amend the IFR/IFD could follow in 2026.

As an operator of regulated markets, Deutsche Börse Group welcomed the new rules, as they acknowledge and support the important contribution of investment firms to trading and liquidity provision.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

High-frequency trading (HFT) is an algorithmic trading technology allowing securities transactions to be executed via extremely quick high-performance computers. HFT participants provide liquidity to markets, dampen volatility, reduce total transaction costs, and significantly contribute to the reduction of spreads. The resulting improved price quality also benefits companies through lower financing costs. HFT thus plays a major role in efficient and functioning capital markets and has economic benefits.

However, as with other technological innovations, certain risks such as increased volatility, market manipulations or technical errors cannot be ruled out. Deutsche Börse Group effectively counteracts these risks through comprehensive safety measures such as plausibility checks and circuit breakers, thereby safeguarding proper conduct of trading. Additional regulatory measures which contribute to the minimization of these risks should expressly be supported. 

Engaged firms must ensure maintenance of the necessary technical infrastructure in terms of their systems’ resilience and act in compliance with certain algorithmic trading thresholds preventing market distortions and market abuse. Investment firms are obliged to provide competent authorities with a description of the nature of their algorithmic trading strategies, details of the trading parameters or limits to which the system is subject, the key compliance and risk controls that it has in place and details of the testing of its systems at any time upon the authority’s request.

Trading venues must provide their share in preventing distortions caused by algorithmic trading through the building-in of circuit breakers, the regulation of minimum tick sizes, and by putting caps on the unexecuted orders in relation to transactions. HFT is regulated at EU level by MiFID II/MiFIR and at German national level by the German High-Frequency Trading Act.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.

The Undertakings for Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Manager Directive (AIFMD) have reshaped the operational landscape of the European investment funds market. The UCITS Directive, which covers mutual funds, introduces uniform rules allowing mutual funds to be offered across borders, while the AIFMD, which covers hedge funds and private equity, prescribes rules for authorizing, supervising, and overseeing the managers of such funds. Jointly, both directives aim to implement a framework that increases transparency and ensures greater investor protection. 

In 2021, the European Commission initiated a comprehensive review of both directives to evaluate their effectiveness and address regulatory gaps. After more than two years of negotiations, the final text of the amendment directive was published on March 26, 2024. The so-called AIFMD II took effect on April 15, 2024, and affects both the AIFM and UCITS directives. Member states are required to implement the new regulations into national law by April 16, 2026; certain reporting obligations will only apply from April 16, 2027.

The reforms aim to further increase transparency and strengthen investor protection. Asset management companies and custodians are particularly affected, as they must adapt to a range of new requirements. One of the key changes concerns credit funds: AIFMD II introduces specific regulations for funds that directly grant loans for the first time. Additionally, asset management companies of open-ended funds are required to select at least two liquidity management tools from a predefined list to bolster stability during stress periods. The requirements for outsourcing and the substance of asset management companies particularly regarding the qualifications and responsibilities of members of the governing bodies have also been tightened. The scope of permissible activities and the documents to be submitted as part of the approval process have been expanded. Furthermore, the regulatory reporting for AIF and UCITS management companies has been harmonized, with a significant expansion of reporting on outsourcing agreements.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications. 

Recovery and Resolution for CCPs is the last missing piece in the puzzle of implementing the G20 objectives. It will complement the high standards implemented through EMIR and confirm the CCPs’ role as a neutral risk manager for financial markets. Its aim is to define measures to be taken in extreme but plausible events of financial distress and ensure the continuity of clearing of key critical contracts, while excluding the use of public resources and preserving financial stability.

Following adoption by the co-legislators, the final legislative text was published in the EU Official Journal in January 2021 and entered into force the following month. ESMA conducted important Level 2 work to specify the file’s application, especially on the No-Creditor-Worse-Off (NCWO) counterfactual and the 2nd Skin in the Game (SITG) technical standards. The new CCP Recovery and Resolution rules have been fully applicable since August 2022 with the EU becoming one of the first jurisdictions to have a fully-fledged recovery and resolution framework, setting a benchmark at a global level.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.