FASTER Directive Market Capitalisation Data: Securities Scope

ByOfficer

On 10 July 2026, the European Securities and Markets Authority published the first set of market capitalisation figures and ratios for EU Member States under the FASTER Directive, Council Directive (EU) 2025/50. The figures cover reference years 2024 and 2025, and they start a multi-year clock that will decide which national markets have to build the harmonised withholding tax relief machinery for dividends on publicly traded shares.

For a custodian bank, a paying agent or a central securities depositary, this FASTER Directive market capitalisation data is the first hard input into two questions that used to sit in the future-problem pile. Which of the withholding markets I touch will run a relief-at-source or quick refund system? And which of the securities I hold fall inside the directive’s scope at all? The published ratios speak to the first question. The definition of a publicly traded share settles the second.

Neither answer is fixed today. The directive’s initial scope test reads off the ESMA publications available on 31 December 2028, and the harmonised systems apply from 1 January 2030. The value of this first release is preparation. It lets tax operations and reporting teams see where each market sits against the 1.5% line and classify their instrument population before any build work has to begin.

Related reading: EU Tax Simplification Package 2026: the DAC recast and reporting.

What ESMA published on 10 July 2026

ESMA released two items: a document of market capitalisation figures and ratios (reference ESMA12-2121844265-6026) and a raw-data annex (reference ESMA12-2121844265-6028). Together they give, for every Member State, the total value of its publicly traded shares and that value expressed as a share of the Union total. ESMA describes the exercise as the first implementation of its mandate under the FASTER Directive, for which it developed technical standards on the calculation methodology and now has a standing duty to publish annual figures and ratios.

The single fact reporting teams should carry away: the release is a measurement, published early so that authorities and market participants can prepare, and no Member State enters the relief-at-source regime on 10 July 2026 as a result. The directive attaches consequences to a run of measurements over time, not to one snapshot.

Pull the raw-data annex before the summary document. The annex is where a tax operations team can read its own withholding markets against the 1.5% line and keep a dated copy for the audit trail, because the scope test later this decade will depend on a sequence of these annual figures.

The dates that govern the sequence are worth keeping in one place:

  • 10 January 2025 was the Official Journal publication date of Council Directive (EU) 2025/50 (OJ L, 2025/50).
  • 10 July 2026 is the first ESMA publication of market capitalisation figures and ratios, covering reference years 2024 and 2025.
  • 31 December 2028 is the transposition deadline for Member States, and the cut-off date for the ESMA publications used in the initial four-consecutive-year scope test.
  • 1 January 2030 is the date from which national relief-at-source and quick refund rules apply in Member States within scope.
  • Each year thereafter, ESMA publishes updated figures and ratios, so the observation window keeps rolling.

Which securities are in scope: publicly traded shares and bonds

The scope question is narrower than the phrase withholding tax suggests. The directive attaches to dividends from publicly traded shares and to interest from publicly traded bonds. A publicly traded share is defined as a share admitted to trading on a regulated market or traded on a multilateral trading facility. A publicly traded bond adds a third venue: a regulated market, a multilateral trading facility or an organised trading facility.

That definition draws the boundary using the same venue concepts that drive MiFID II and MiFIR. If you already classify instruments by trading venue for transaction reporting, you have most of the reference data you need. Our guide to MiFIR transaction reporting walks through the regulated market and multilateral trading facility distinctions that the FASTER definition borrows.

Two practical points follow. Dividends on unlisted or privately held shares stay outside the FASTER procedures and continue under whatever national relief route already applies. And the instrument that matters is the one being paid on, so the classification has to be done at instrument level, holding by holding. A custodian holding a mixed book will find that only part of it generates the payments the directive governs.

This is also where the directive should be kept apart from the automatic exchange of information regimes. FASTER governs the procedure for granting treaty relief on withholding tax, a different mechanism from the residence-based information reporting under the Common Reporting Standard or FATCA. A firm can be in scope for all three, and the data each one needs overlaps only in part.

How the FASTER Directive market capitalisation ratio decides scope

The market capitalisation ratio is a per-country figure. The directive defines it as a Member State’s market capitalisation on 31 December as a percentage of the overall market capitalisation of the Union on 31 December in the same year. ESMA computes and publishes it; the threshold work happens in the directive.

Under Article 2, the Chapter III procedures apply to a Member State in either of two situations. The first is where the State does not operate a comprehensive relief-at-source system for excess withholding tax on publicly traded shares. The second is where its market capitalisation ratio reaches or exceeds 1.5% of the Union total for each of four consecutive years, measured on the four latest ESMA publications available on 31 December 2028. A State that already runs a comprehensive relief-at-source system and stays below the 1.5% line sits outside Chapter III, until it crosses the threshold across four consecutive publications.

Two features of that test tend to be read wrongly. The threshold looks at the source Member State that levies the withholding tax on the payment. The size of the individual security and the residence of the investor do not enter the calculation. And the obligation, once it arrives, does not switch off. Article 2 provides that a Member State applies Chapter III within five years of the fourth consecutive publication showing a ratio at or above 1.5%, and that once Chapter III applies it remains applicable to that State even if the ratio later falls back below the line.

For an intermediary the reading is straightforward in principle. The markets most affected by this first data set are the mid-sized ones that already grant relief at source and sit close to 1.5%, because for them the ESMA ratio is what decides whether the harmonised regime becomes mandatory. The largest markets sit comfortably above the line and the smallest sit well below it; the ESMA annex gives the exact figure for each Member State.

What certified financial intermediaries and custodians take on

Chapter III builds a registration and reporting layer around the payment chain, extending beyond how tax is relieved, and this is the part custodians and paying agents should scope now.

The directive creates a certified financial intermediary, defined as a financial intermediary registered with a national register. Member States establish those registers under Article 5 and make them visible through a European Certified Financial Intermediary Portal. Article 7 requires large institutions that handle payments of dividends and, where relevant, interest on the securities in scope, together with central securities depositaries that are the withholding tax agent for those payments, to register with the national register. Non-EU intermediaries and smaller EU intermediaries may register on a voluntary basis. Registration is the gateway to acting as a certified intermediary, and the beneficial-owner due diligence runs alongside it.

The reporting obligation is where operational cost lands. A certified financial intermediary reports the payment information within the second month following the month of the payment date, and the information under headings A to E of Annex II is mandatory, with some further headings left to Member State discretion. Supporting documentation has to be retained for ten years. Because the deadline runs from each payment month, a firm processing dividends across many source markets carries a rolling monthly reporting cycle instead of a single annual filing. A certified intermediary can report directly to the competent authority, or pass information along the securities payment chain in sequential order so that it reaches the withholding tax agent or the designated intermediary.

For a custodian that sits mid-chain, the direct-versus-sequential choice is a real design decision. It determines who holds the reporting relationship, where the payment data has to be complete, and which party carries the exposure if a link in the chain is missing or late. A sub-custodian passing information upward has to trust that the next intermediary forwards a complete record; a firm that reports directly keeps control but takes on the full data-assembly burden itself. Groups that operate the same book across several source markets will often make different choices market by market, depending on where they already hold the cleanest beneficial-owner data.

Alongside the reporting sits the electronic tax residence certificate. Article 4 requires Member States to run an automated process that issues a digital tax residence certificate, the eTRC, within 14 calendar days of a request, and to recognise an eTRC issued by another Member State as proof of residence. For firms used to chasing paper certificates per claim, a single machine-readable certificate that other Member States must accept is the change most likely to reshape the relief workflow. The due-diligence discipline this imposes on intermediaries has a familiar shape for anyone who has built out DAC7 platform operator reporting, where the registration, verification and reporting steps follow a similar sequence.

Reading the first data set: a scope-mapping walkthrough

The publication is only useful if it turns into a map. A workable sequence for a reporting or tax operations team looks like this.

Start with the withholding markets you actually touch, meaning the source States where your book generates dividend or interest payments subject to withholding. Pull each State’s ratio from the ESMA raw-data annex and record it with the reference year and the publication date. Sort the markets into three buckets: comfortably above 1.5%, comfortably below, and close to the line. The middle bucket is the one to watch across successive annual publications, because a run of four consecutive years at or above 1.5% is what pulls a State that already grants relief at source into the harmonised regime.

Next, classify the instruments. Flag the holdings that are publicly traded shares or bonds by trading venue, and separate them from unlisted positions the directive does not govern. This is the securities-scope determination the whole exercise turns on, and it is instrument-level work that cannot be shortcut at portfolio level. Positions that changed trading venue during the year are the ones most likely to be misclassified, so the venue check should be tied to the payment date.

Then place your own entities on the map. Identify where the group acts as a large institution handling dividend or interest payments, or as a central securities depositary, because those roles carry the mandatory registration under Article 7. A group operating across several Member States may hold different roles in different chains, and the registration and reporting obligations follow the role each entity plays.

The output is a market-by-market, instrument-by-instrument picture that can be refreshed each year when ESMA republishes. Doing it now, against the first figures, means the build decisions in 2028 and 2029 start from a maintained map rather than a standing start. The same logic applies to knowing where your regulatory disclosures must be findable, a discipline ESMA is pushing separately through the European Single Access Point.

Frequently Asked Questions

Does the July 2026 publication put any Member State into the FASTER relief-at-source regime now?

No. The publication is a measurement. The initial scope test under Article 2 reads the four latest ESMA publications available on 31 December 2028, and the harmonised systems apply from 1 January 2030 for Member States within scope. The 2026 figures are the first data point in that sequence and are meant to support preparation.

Which securities fall within FASTER’s relief procedures?

Dividends from publicly traded shares and interest from publicly traded bonds. A publicly traded share is one admitted to trading on a regulated market or traded on a multilateral trading facility; a publicly traded bond can also be traded on an organised trading facility. Dividends on unlisted or privately held shares remain under existing national relief routes.

What does the 1.5% market capitalisation ratio actually measure?

A Member State’s market capitalisation on 31 December as a percentage of the Union total on the same date, published annually by ESMA. A ratio at or above 1.5% for four consecutive years is the trigger that pulls a State which already grants relief at source into the harmonised Chapter III regime. It measures the source market itself; the investor and the individual security fall outside what the ratio captures.

My institution is a custodian in several EU markets. Must it register?

Article 7 requires large institutions that handle dividend and, where relevant, interest payments, together with central securities depositaries that are the withholding tax agent for those payments, to register with a national register. Non-EU and smaller EU intermediaries may register voluntarily. Registration is the gateway to acting as a certified financial intermediary, and it does not remove the beneficial-owner due diligence that comes with claiming relief.

When must a certified financial intermediary report payment information?

Within the second month following the month of the payment date. The information under headings A to E of Annex II is mandatory, with further headings left to Member State discretion, and supporting documentation must be kept for ten years. Reporting can be direct to the competent authority or passed in sequence along the payment chain.

What is the eTRC and how quickly must it be issued?

The eTRC is a digital tax residence certificate issued through an automated national process. Article 4 sets issuance within 14 calendar days of a request, and requires each Member State to recognise an eTRC issued by another as proof of tax residence. It is intended to replace the per-claim paper certificate.

Does FASTER replace CRS, FATCA or DAC reporting?

No. FASTER governs the procedure for relieving excess withholding tax on cross-border dividend and interest payments. The Common Reporting Standard and FATCA are automatic information-exchange regimes with a different purpose. A firm can be in scope for several of them at once, and the data sets overlap only partly.

If a Member State drops below 1.5% after entering scope, does it leave the regime?

No. Article 2 provides that once Chapter III applies to a Member State it remains applicable, even if the market capitalisation ratio later falls below the 1.5% line. The obligation is designed to be durable once triggered.

Related Articles

Key Takeaways

  • ESMA published its first market capitalisation figures and ratios under the FASTER Directive on 10 July 2026, covering reference years 2024 and 2025, in documents ESMA12-2121844265-6026 and ESMA12-2121844265-6028.
  • The release is a first annual data point in a multi-year sequence; no Member State enters the relief-at-source regime as a result, and the initial scope test reads the ESMA publications available on 31 December 2028.
  • The securities in scope are publicly traded shares and bonds, defined by trading venue (regulated market, multilateral trading facility, and for bonds an organised trading facility). Unlisted holdings stay outside the FASTER procedures.
  • Chapter III applies to a source Member State that lacks a comprehensive relief-at-source system, or whose ratio is at or above 1.5% for four consecutive years. Once it applies, it stays, even if the ratio later falls.
  • Large institutions handling dividend or interest payments and central securities depositaries that are the withholding tax agent for those payments must register under Article 7; non-EU and smaller EU intermediaries may register voluntarily.
  • Certified financial intermediaries report within the second month following the payment month, with Annex II headings A to E mandatory and ten-year documentation retention.
  • The eTRC, an automated digital tax residence certificate issued within 14 calendar days under Article 4, is recognised across Member States and replaces the per-claim paper certificate.
  • Transposition is due by 31 December 2028 and the national systems apply from 1 January 2030. Building a maintained market-and-instrument scope map now shortens the later build.

Sources and References

  • European Securities and Markets Authority, “ESMA publishes first market capitalisation data for EU Member States”, 10 July 2026: esma.europa.eu (related documents ESMA12-2121844265-6026 and ESMA12-2121844265-6028).
  • Council Directive (EU) 2025/50 of 10 December 2024 on faster and safer relief of excess withholding taxes (the FASTER Directive), EUR-Lex: eur-lex.europa.eu.
  • European Commission, Taxation and Customs Union, “FASTER Directive”: taxation-customs.ec.europa.eu.
  • EUR-Lex summary, “Faster and safer relief of excess withholding taxes”: eur-lex.europa.eu.
  • eucrim, “FASTER Directive on Excess Withholding Taxes Published” (Official Journal publication 10 January 2025): eucrim.eu.

Turning the first figures into a scope map

The July 2026 publication is quiet by design. No obligation lands, no template goes live, and the numbers themselves change nothing on the day. What they change is the information available to plan with. A custodian or paying agent can now read each withholding market against the 1.5% line, classify its instruments as publicly traded or unlisted, and identify where the group will carry mandatory registration. Doing that annually as ESMA republishes turns a distant 2030 obligation into a maintained map, so the build starts from evidence already in hand.

Last updated: July 2026

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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