Zeidler Group has shed light on the European Commission’s Market Integration Legislative proposal, published on 4 December 2025, which takes direct aim at the structural fragmentation that has long undermined the EU’s single market for investment funds.
The RegTech company recently delved into the EU’s Market Integration Legislative proposal and what it means.
As Zeidler Group explains, the proposal restructures the cross-border marketing and supervision framework for UCITS and AIFs around a single reinforced regulation, significantly expanding the role of ESMA in the process. Expansion of Regulation (EU) 2019/1156 — the Cross-Border Distribution Regulation — sits at the core of the changes, replacing the fragmented rules previously spread across UCITS and AIFMD provisions and becoming the central legal framework for cross-border marketing across the bloc.
A key structural shift identified by Zeidler Group is the move away from nationally implemented notification-based passports towards a harmonised, authorisation-anchored framework. Notification and de-notification processes are standardised at EU level, with separate but consistent passporting regimes introduced for both UCITS and AIFMs. Host authorities’ powers are expressly limited to marketing communications and investor-facing conduct, while prior approval of marketing materials by host authorities is explicitly prohibited.
Zeidler Group further highlights that ESMA gains a substantially expanded mandate under the new rules. The regulator will develop and operate a central data platform for all passporting notifications, maintain a public register of cross-border marketed funds, and take on new powers to address supervisory obstacles and facilitate dispute resolution between national authorities. ESMA will also be permitted to charge fees to UCITS and AIFMs to fund these responsibilities.
For alternative investment fund managers, Zeidler Group points to a simplification of the pre-marketing regime, with the removal of the rule that automatically treated professional investor subscriptions within 18 months of pre-marketing as marketing activity, and the scrapping of the 36-month lock-out period following de-notification.
One key uncertainty flagged by Zeidler Group surrounds the transitional arrangements. While the proposal sets a 24-month window for establishing the ESMA platform, the mechanics for migrating existing notifications to the new system remain unclear, leaving some risk of interim discontinuity during implementation.
For more insights into the new proposal, read Zeidler’s full analysis here.
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