A powerful coalition of European financial trade associations has urged the European Commission not to adopt a U.S.-style trading framework under its flagship Savings and Investments Union (SIU) initiative.
The move underscores growing tension between policymakers in Brussels and key players in Europe’s financial markets over how best to advance capital markets integration.
In a joint letter to commissioner Maria Luís Albuquerque, four major financial associations — the Association for Financial Markets in Europe (Afme), the European Fund and Asset Management Association (Efama), the Federation of European Securities Exchanges (Fese), and the European Principal Traders Association (FIA Epta) — expressed strong support for the SIU’s long-term objectives. But they drew a firm line against regulatory proposals that would mandate price-based routing of orders across all EU trading venues, a model inspired by the U.S. National Market System.
The associations argue that the current course of action would entail creating a hugely complex system and discourage anyone from investing in innovation to compete.
“We do not view connectivity to liquidity pools in the equities space as a problem area necessitating a remedy,” the four associations wrote. “Proposals inspired by other jurisdictions, such as mandating connection to trading venues by intermediaries or implementing a best execution regime focused exclusively on execution price, would not be effective in the European context,” they said in the letter sent Tuesday.
EC considers centralised order-routing system
At stake is whether the EU should implement a centralised order-routing system to enhance competition and investor protection across the bloc’s fragmented trading landscape. While the Commission raised this idea in its March strategy paper as a way to improve execution quality, market participants argue that such a system would introduce unnecessary cost and complexity.
The industry coalition warns the proposal could backfire by leading to adverse selection and stale prices for investors. It could also hinder innovation and place the EU at a disadvantage in global markets. “Regulation should support and advance the interests of investors and issuers by facilitating choice and reducing cost and complexity,” the letter states.
Alfi also raised concerns
The joint position aligns with broader concerns raised by Luxembourg’s fund industry. On 10 June 2025, the Association of the Luxembourg Fund Industry (Alfi) submitted its response to the Commission’s consultation, welcoming the SIU initiative as a vital effort to transform passive savings into active investment. However, Alfi also cautioned against unnecessary revisions to frameworks such as Ucits and AIFMD, which it described as “functioning well.”
“What works well should not be fixed,” ALFI stated in its response.
The Luxembourg association emphasized the need to streamline reporting requirements, simplify investor disclosures, and avoid overlapping regulatory obligations. Alfi also expressed support for revising the DLT Pilot Regime and called for improved cross-border regulatory convergence, without transferring supervisory powers to a central EU authority.
Both Alfi and the pan-European trade bodies advocate for a bottom-up approach focused on removing practical barriers to market participation rather than imposing top-down structural reforms. The emphasis is on building investor confidence, supporting pension adequacy, and ensuring Europe’s long-term competitiveness.
Albuquerque’s ambitions
Commissioner Albuquerque, in a March speech launching the SIU strategy, took a more ambitious stance. “Europe cannot afford to remain a patchwork of markets when our citizens are being priced out of their own growth opportunities,” she said. “We must act boldly to integrate markets, ensure best execution, and build investor trust.”
With consultation responses now submitted, the European Commission will weigh a range of industry and policy perspectives as it prepares the next steps in shaping the future direction of EU capital markets.
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