EU financial regulation in 2026 will mean tougher scrutiny from supervisors and fewer new rules. With major frameworks on fund regulation, anti-money laundering, sustainability and market structure largely in place, the focus is shifting from lawmaking to enforcement. Across liquidity management, delegation and distribution, AML oversight and transparency requirements, experts see firms entering a year shaped by supervisory interpretation and uneven application.
Across EU finance, supervisors are paying less attention to what is written in policies and more to how firms respond when markets come under stress. For banks, asset managers, and fund platforms operating across borders, this shift brings a familiar challenge: diverging supervisory expectations within a system that is still only partially harmonized.
“Most of the challenges with the incoming EU regulation isn’t disclosure, but the duplication of disclosures.”
Steven King, Resource Management Service, LLC
Liquidity under the microscope
The first major test comes in April, when revised rules under AIFMD II and UCITS VI begin to apply. The aim is to ensure that investment funds are better prepared for large-scale redemptions. On paper, the logic is straightforward. In practice, implementation is proving more complex.
Funds will be required to maintain more than one liquidity management tool and to define in advance how and when those tools may be used. But supervisors are no longer satisfied with formal availability alone. The focus is increasingly on whether those tools can be activated quickly, consistently, and fairly when conditions deteriorate, and on whether boards are prepared to make and defend those decisions.
The discussion has shifted away from documentation toward operational reality. Supervisors want to know whether liquidity measures will work in real time, not just whether they exist in theory.
Legal clarity still missing
That pressure is compounded by unresolved legal questions. While the obligation to maintain multiple liquidity management tools is clear, uncertainty remains over when such tools are considered selected or activated, and how they count toward the minimum requirements under AIFMD II and UCITS VI. These distinctions become critical in supervisory reviews, particularly during periods of market stress.
“The main supervisory friction points will emerge around liquidity management tools,” said Sebastiaan Hooghiemstra, senior associate at law and tax firm Loyens & Loeff. Without further clarification at the EU level, he warned, national supervisors may take different approaches, increasing complexity for managers operating cross-border structures.
Distribution and delegation add complexity
The revised fund rules also introduce new gray areas around delegation and distribution. A key question is when distributors are considered to be acting on their own behalf, a distinction that determines whether certain MiFID II-related derogations apply. The wording leaves room for interpretation, particularly for tied agents, management companies with MiFID II permissions, and third-country distributors marketing EU funds.
Nominee structures, widely used in Luxembourg-based fund distribution, are another example. While generally accepted in practice, they lack explicit EU-level confirmation, leaving firms exposed to differing supervisory views.
Supervisors are increasingly assessing these elements together. Liquidity tools, delegation models, and distribution arrangements are expected to form a coherent governance narrative that holds up not only in normal market conditions, but also under stress.
AML reform follows a similar pattern
A similar dynamic is visible in the EU’s overhaul of its anti-money laundering regime. The new Anti-Money Laundering Authority this year will continue to prepare itself for full operability in 2028. The immediate change for financial firms will be limited.
“2026 marks the EU’s shift from fragmented to harmonized AML supervision, but it remains a transitional year with the new architecture still being built,” said Sandrine Périot, partner at Arendt Regulatory and Consulting.
The core EU Anti-Money Laundering Regulation will not apply until July 2027, and fully centralized supervision of selected high-risk institutions is only expected to begin in 2028. Until then, firms will continue to operate largely under national AML regimes.
“National supervisors retain operational oversight in 2026-2027, while AMLA designs the future framework. Full centralized and unified supervision will only materialize between 2027 and 2028,” Périot said.
Wrestling with CSRD and SFDR
Other regulatory areas will also move into sharper supervisory focus in 2026, even if they sit outside the main legislative spotlight. Sustainable finance is one such area. Larger companies will begin reporting under the Corporate Sustainability Reporting Directive (CSRD), increasing the volume of sustainability data available to supervisors, while regulators continue to wrestle with the practical application of the Sustainable Finance Disclosure Regulation (SFDR) amid persistent concerns over complexity and inconsistent interpretation.
Market structure reforms are expected to advance more gradually, with further work on consolidated tapes under MiFIR, which governs transparency and trading rules across EU markets, and additional reporting changes under EMIR, the framework overseeing derivatives clearing and risk mitigation.
“Most of the challenges with the incoming EU regulation isn’t disclosure, but the duplication of disclosures,” said Steven King, vice president of business development at Resource Management Service, LLC. “Investors are often asking for the same information in slightly different formats, which creates reporting fatigue and compliance costs without improving decision-making. That’s why alignment matters. If those frameworks become the backbone, everyone spends less time reformatting data and more time actually managing risk.”
EU regulations coming into effect in 2026:
- 16 April: new AIFMD/UCITS rules
- 2 July: ESG Ratings Regulation
- 31 July: Article 7b reporting related to active account requirement (EMIR)
- Q2/Q3: Launch of bond and equity consolidated tapes
- From Q3 2026: Rules on high-risk AI systems start entering into force in phases
Key regulatory files:
- Trilogues on MISP, SFDR, securitisation, digital omnibus, PEPP & IORP
- Technical trilogues on RIS, FiDA
- Adoption of revised CSRD standards
- Revision of the Shareholders Rights Directive (SRD)
- Consultation expected on sustainability preferences in MiFID/IDD
- Consultations from new AML Authority
- ESMA report on simplifying financial transaction reporting
- ESMA report on integrated reporting
- ESMA report assessing the effectiveness of the active account requirement
Source: EFAMA.