Regulatory Review: June 2026

Research evidence excerpt

Regulatory Review: June 2026

Foundation

June 26, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+MSustainability | Europe Rachel Fletcher, Ph.D.

Equity Strategist

Regulatory Review: June 2026 Rachel.Fletcher@morganstanley.comArushi Agarwal, CFA +44 20 7677-4089

Arushi.Agarwal1@morganstanley.com +44 20 7677-3944

In this monthly Regulatory Review, we highlight key Morgan Stanley & Co. LLC

developments in European environmental and social regulation Stephen C Byrd

and answer investor FAQs. In this edition: the ETS Directive EquityStephen.Byrd@morganstanley.comAnalyst +1 212 761-3865

review, CBAM, SFDR reform, the EU Diversification Law, and the Morgan Stanley Asia Limited+

UK's child online safety measures. Ehsernta Fu

Ehsernta.Fu@morganstanley.com +852 3963-3711MIn this month's Regulatory Review, we outline our expectations for the upcoming

review of the EU Emissions Trading System (ETS) Directive, which is expected on 15

July. We summarise the Council's negotiating positions on the Commission's

December Carbon Border Adjustment Mechanism (CBAM) proposal, including

Article 27a, and on the reform of the Sustainable Finance Disclosure Regulation

(SFDR). Security and resilience are emerging policy priorities; we summarise

Commission President Ursula von der Leyen's plans for a new EU Diversification Law

requiring companies to diversify key supply sources. Finally, we provide an overview

of the UK's proposed social media ban for under-16s in the context of broader AI and

tech regulation.

1. What are your expectations for the ETS Directive Review?

2. What's the latest on CBAM?

3. What are the implications of the Council's final position on the SFDR reform?

4. Is supply chain diversification a new regulatory priority for the EU?

5.