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EU finance ministers agree MISP position as ESMA eases third-country CSD cliff-edge

The Council deal on the Market Integration and Supervision Package came two days after ESMA told national supervisors to hold off on enforcement against unrecognised third-country CSDs after 17 January.

By Midpoint Staff
3 min read
The Berlaymont building, seat of the European Commission, in Brussels
Photo: EmDee / Wikimedia Commons, CC BY-SA 4.0 · licence

At their meeting on 9 October, EU finance ministers reached agreement in the Council on the Market Integration and Supervision Package (MISP). The Irish Presidency called the package “a centrepiece of the savings and investments union”.

“Europe has the savings. Now it’s time to put them to work,” said Simon Harris, Ireland’s Tánaiste and Minister for Finance. He called the deal “a major step forward for a deepened savings and investments union” that would help “unlock the full potential of the single market for financial services”.

The agreement sets the Council’s position. It does not complete the legislative process. In its 2027 work programme, published on 28 September, ESMA said it expects co-legislators to reach final agreement on MISP in 2027, after which it will prepare for the resulting changes to its mandates.

The Presidency’s summary of the meeting did not set out the detailed content of the Council text. The Council’s own press release could not be accessed for this article, so we do not report its contents.

The third-country CSD problem

One part of the package already had an urgent date attached, and ESMA acted on it two days earlier.

Under Article 25 of the Central Securities Depositories Regulation (CSDR), third-country CSDs can provide two services for instruments constituted under EU member-state law:

  • notary services to issuers
  • central maintenance services to participants

A transitional regime lets those already providing the services continue until a recognition decision is taken or until 17 January 2027, whichever is earlier. MISP would extend that period by three years after the package enters into force. However, the package will not be in force by January.

In a public statement on 7 October, ESMA said issuers in particular had raised concerns about losing access to those services after the deadline, and had asked for guidance in good time.

ESMA was clear about the limits of its powers. Neither ESMA nor national competent authorities can “temporarily suspend or disapply a directly applicable EU legal text, even in exceptional circumstances”, it said. Instead, citing “the emerging consensus between EU co-legislators”, ESMA:

expects NCAs not to prioritise their supervisory and enforcement actions in relation to third-country CSDs not recognised by ESMA, until the extended transitional period proposed in the MISP takes effect.

The statement points to evidence of support from both co-legislators:

  • Council: the Cyprus Presidency progress report recorded “broad support” for extending the grandfathering period.
  • Parliament: no amendments to the relevant provision were tabled in the ECON committee.

Why it matters

For issuers and agents that use non-EU CSDs, ESMA’s statement is supervisory forbearance, not legal certainty. The legal deadline of 17 January still stands, but enforcement is unlikely while the extension is pending. Legal and compliance teams should record their reliance on the statement and monitor the MISP timetable.

More broadly, a Council position means negotiations with Parliament can move ahead on the EU’s main structural capital markets proposal. Venues, CCPs and CSDs should prepare for a longer process. ESMA’s own planning assumes final agreement in 2027, with the changes to supervisory mandates that MISP proposes following after that.

Sources

Sources

  1. Results of the Meeting of Finance Ministers, 9 October 2026 — Irish Presidency of the Council of the EU, 9 Oct 2026
  2. ESMA clarifies access for EU market participants to the services of third-country CSDs — ESMA, 7 Oct 2026
  3. Public Statement: Extended transitional period for third-country CSDs (ESMA74-2119945926-3877) — ESMA, 7 Oct 2026
  4. ESMA 2027 Annual Work Programme — ESMA, 28 Sep 2026

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