The European Union's competitiveness and prosperity depends on an optimal allocation of private capital; however, although free circulation of capital is guaranteed by the Treaties, the EU's capital markets remain fragmented due to 'technical barriers' and legal uncertainties falling on cross-border investors and institutions. A major reason for that is that EU rules are mostly set out through directives, leaving Member States' supervisory authorities latitude in their interpretation and application of the rules. Therefore, the European Commission considers the use of regulations instead of directives, as well as the establishment of EU-level single supervision, as two policy instruments to 'integrate' – i.e. 'defragment' – the EU's capital markets. On 4 December 2025, the Commission issued a package of three proposals to address this situation (the 'market integration package'), as part of its savings and investments union strategy. One of the three proposals would be a regulation on the settlement finality, thereby converting and replacing the existing directive. The directive establishes the finality and irrevocability of transfer orders once entered, even in the event of a participant's insolvency, with the aim of reducing stability risks in the payment and settlement systems. Source : © European Union, 2026 - EP Read more