On February 10, 2016, the European Commission proposed a one-year extension to the effective date of the Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation, collectively known as MiFID II. The proposal, if approved, would mean that national regulators would have an additional year to comply with MiFID II. The new effective date would be January 3, 2018 instead of January 3, 2017. This extension is considered to be necessary due to the technical implementation challenges that national regulators and market participants are facing, particularly around transaction reporting and related data collection systems. The Commission was previously informed by the European Securities and Markets Authority that national regulators and market participants would not have the necessary systems operational by the original application date, and that an extension would therefore be necessary so as to avoid potential market disruption and legal uncertainty. The extension will not affect the adoption of the technical standards which will continue to proceed through regulatory processes. The Commission has also proposed delaying the application of certain provisions of the Market Abuse Regulation and the Central Securities Depositories Regulation. Both regulations refer to definitions and concepts in MiFID II. These proposed extensions are subject to approval by the European Parliament and the European Council and no deadline has been set for such approval.

The Commission’s press release is available at: http://europa.eu/rapid/press-release_IP-16-265_en.htm.

The Commission’s proposals are available at: http://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-57-ENF1-1.PDF.

Our client note on the Commission’s proposals is available at: http://www.shearman.com/en/newsinsights/publications/2016/02/delay-implementation-of-mifid-ii.