EU: ESMA speech on single reporting framework and fund tokenisation rules

Why should I read this?

On 12 June 2026, the European Securities and Markets Authority (ESMA) Chair Verena Ross gave a speech on “Priorities for European asset management: simplification, innovation, resilience and trust”, at the European Fund and Asset Management Association (EFAMA) conference in Brussels. 

She set out four priorities for EU asset management: a single reporting framework, fund tokenisation through distributed ledger technology (DLT), market resilience and financial stability, and retail investor empowerment. ESMA will consult on draft technical standards for reporting by end of 2026. The speech signals a major shift in how EU fund managers will report to supervisors. It also confirms that ESMA is gathering evidence on fund tokenisation, an area in which the UK is significantly further ahead following the FCA’s Policy Statement PS26/7 “Progressing fund Tokenisation”.

What should I do?

Fund managers operating in both EU and UK jurisdictions should consider the following steps:

Reporting

Map your current EU reporting obligations under AIFMD and the UCITS Directive. ESMA’s single reporting template will consolidate these first. Assess how your systems can accommodate the new modular format. The FCA has not announced equivalent reforms, so UK and EU reporting standards are likely to further diverge.

Tokenisation

Review your fund distribution and operational infrastructure against the DLT developments Ross describes. The UK is significantly ahead: the FCA’s PS26/7 confirms public blockchains are acceptable and on-chain records can serve as primary books and records. ESMA remains at an evidence-gathering stage.

See our previous client briefings:

• UK: FCA policy statement on tokenisation of authorised funds
• UK: FCA policy statement on fund tokenisation - tMMFs; the roadmap; and future tokenisation models

Market resilience

Assess your fund’s exposure to concentrated technology positions and US equities. EU equity funds hold 45% exposure to the US market. Review your liquidity management tools and be ready for enhanced reporting obligations under the revised AIFMD and UCITS Directive.

See our previous client briefings:

• EU: ESMA liquidity management tools standards and guidelines for UCITS and AIFs
• UK: FCA’s Liquidity Management Multi-Firm Review

Retail disclosure

Monitor developments on the EU PRIIPs Key Information Document (KID) revisions. Past performance will likely replace performance scenarios for investment funds. The costs section will be simplified. In the UK, the Consumer Duty provides the overarching framework for retail investor outcomes and the CCI regime will replace PRIIPs in due course.

See our previous client briefing:

• UK: FCA Policy Statement on Consumer Composite Investments (CCI)

What do I need to know about ESMA’s priorities?

Reporting simplification

More than 100 European and national reporting obligations apply to funds and fund managers. ESMA concludes that significant change is required. It proposes a common, single reporting template, designed in a modular way. The “report once” principle will mean that data is reported to one authority and then shared across all supervisors, including the European Central Bank (ECB) and national central banks.

ESMA proposes a phased approach. Phase 1 integrates reporting under AIFMD and the UCITS Directive. Phase 2 extends this to other obligations, including the Money Market Fund Regulation (MMFR) and ECB statistical reporting. Data collection will remain at national level through national competent authorities (NCAs), but a centralised hub will handle validation, storage, access and analysis.

On transaction reporting, ESMA proposes simplification measures including revision of dual-side reporting. The longer-term goal is integrated reporting under the European Market Infrastructure Regulation (EMIR), the Markets in Financial Instruments Regulation (MiFIR) and the Securities Financing Transactions Regulation (SFTR).

UK comparison

The FCA has not announced equivalent reforms to fund reporting. Managers of EU funds operating from the UK will need to comply with ESMA’s new framework. The potential for regulatory divergence between UK and EU reporting standards is significant. The UK’s Smarter Regulatory Framework (SRF) is focused on migrating retained EU law into the FCA Handbook, but without the same ambition around data integration that ESMA describes.

Codrina Constantinescu, Partner in the Eversheds Sutherland Financial Services team in Luxembourg, comments:

“The ‘report once’ principle is the right direction for the EU, but the implementation challenge is substantial. Managers with cross-border operations need to plan for two parallel reporting environments. Those who engage early with the ESMA consultation on draft technical standards will be best placed to manage the transition.”

Fund tokenisation and DLT

Ross described tokenisation as a change in “operational infrastructure around funds: how units are issued, recorded, transferred, distributed and, potentially, used as collateral.” ESMA’s approach is evidence-based. It is engaging with NCAs to understand real-life cases. It has not yet concluded whether regulatory barriers exist under UCITS and AIFMD.

ESMA raises three open questions:

(1) whether the DLT record is the official register or only an operational layer;

(2) whether on-chain transfers are final; and

(3) whether investors should hold fund units directly or through an intermediary. 

Ross stressed that legal certainty and interoperability are essential. Fragmented national approaches could limit cross-border scalability.

UK comparison

The UK is significantly ahead. The FCA’s PS26/7 (published 30 April 2026) confirms that public blockchains are acceptable for tokenised funds, fund units can be issued on multiple blockchains, and on-chain records can serve as primary books and records. 

Michaela Arter, Partner and European Head of the Financial Services Sector at Eversheds Sutherland, comments:

“The contrast between the UK and EU on tokenisation is striking. The FCA has moved from principles to concrete rules in PS26/7. ESMA is still asking threshold questions about legal status and settlement finality. Both regulators are right to prioritise investor protection, but the UK’s willingness to engage with the detail gives managers operating here a clearer path.”

Market resilience and financial stability

Ross noted that the war in the Middle East has increased geopolitical tensions, with higher energy prices pushing up inflation expectations and tighter financial conditions. Markets have been resilient and trading has remained orderly. But she warned that resilience “should not be mistaken as an absence of vulnerabilities.”

ESMA identifies the following concerns:

• Narrow concentration risk: market performance is driven by a narrow set of technology firms. EU equity funds have 45% exposure to US equities, which are more susceptible to a deflation of a technology-sector bubble.

• Hedge fund leverage: hedge funds have benefited from volatility and were associated with several government bond market turmoil episodes.

• Liquidity risk: the revised AIFMD and UCITS Directive implementing rules on liquidity management tools (LMTs) are expected to improve resilience. Managers must now report LMT use to NCAs.

• Private credit: about “EUR 0.1 trillion” [Ross’ chosen way of saying EUR 100 billion] in assets under management. Limited transparency, relatively illiquid, growing interconnections with banks and insurers.

Trevor Dolan, Partner in the Eversheds Sutherland Financial Services team in Ireland, comments:

“ESMA’s focus on private credit is significant. At EUR 100 billion, the sector is still small. But it is growing quickly and the interconnections with banks and insurers that Ross highlights are exactly what regulators need to monitor. UK managers active in EU private credit should expect enhanced transparency requirements to follow.”

Retail investor empowerment

Ross emphasised the EU’s Savings and Investments Union (SIU) agenda and the Retail Investment Strategy (RIS). The focus is on products that deliver value, disclosures investors can understand, and advice aligned with investors’ interests. The PRIIPs KID will likely be revised to include a “Product at a glance” section, replace performance scenarios with past performance for investment funds, and simplify the costs section and calculation methodologies. The emphasis will be on outcomes.

UK comparison

The EU’s RIS imitates the UK’s Consumer Duty which is an explicitly outcomes based form of regulation and an implicit reaction to the EU’s longstanding focus on process based regulation. Both jurisdictions are simplifying disclosure. The UK is further ahead in removing procedural burdens: HM Treasury has confirmed the removal of mandatory consultation on guidance and minor rule changes as part of the Financial Services Growth and Competitiveness Strategy. Both approaches reflect a shared concern that overly complex rules deter retail participation.

See our previous client briefing:

• UK: FCA and PRA freed from certain consultation requirements

Following the UK’s lead

It is notable that in relation to a number of aspects of financial services regulation, where the UK has led, the EU is following, for instance on research payments, outcomes based regulation, simplifying regulatory burdens, the labelling of ESG funds and the reform or repeal of the unloved PRIIPs KIDs. Recently, the ECON committee of the European Parliament even suggested that ESMA should be given a secondary growth and competitiveness obligation, just as the FCA and PRA were given recently. Regulatory competition between the UK and EU, reinstated on Brexit, is arguably having the effect of driving up standards, to the benefit of both UK and EU markets and consumers, at least in the area of financial services, although that does not mean that in all cases there will be convergence, as the ongoing divergence evident in EU and UK regulatory developments shows. Even where there is convergence, there remain differences between EU and UK approaches reflecting the differing nature of each market.

Next steps

ESMA expects to issue a consultation paper on draft technical standards for fund reporting by end of 2026 and finalise proposals in H1 2027. Phase 1 of the new reporting framework (AIFMD and UCITS) could go live in H1 2029 at the earliest. ESMA will also continue engagement with NCAs on fund tokenisation during 2026.

How we can help

Eversheds Sutherland advises fund managers, depositaries and platforms on EU and UK regulatory requirements for investment funds. We help clients assess the impact of regulatory change across both jurisdictions. Our Financial Services team can assist with:

• Responding to ESMA’s forthcoming consultation on reporting technical standards

• Navigating dual UK/EU reporting and compliance obligations

• Fund tokenisation projects, including work under the FCA’s PS26/7 framework

• Liquidity management, MMF reform and private credit regulatory developments

• PRIIPs KID and retail disclosure reforms