Many of the changes that MiFID II / MIFIR are going to induce in financial markets require the design, construction, testing and operation of IT systems, that will be based on the requirements contained in the Regulations. Some provisions could operate in the absence of all the market players and all authorities being ready. However, some others require a high degree of synchronicity.
The following four areas are where the need for a harmonised start date is especially acute. These four areas are the main concerns in terms of possible delays.
- Reference data
- Transaction reporting
- Transparency parameters and publication
- Position reporting
There is a very high probability of a delay in all of the above 4 systems. At this stage, precisely determining what will be the feasible date for each of the systems is not possible without having the full specifications (RTS/ITS) published and subsequently analysed by IT experts and stakeholders. A first estimate will not be available probably until October/November at the earliest and a final estimate will not be available before March 2016, but very early estimates point out that it could easily amount to one year on average.
The options available to the NCAs, ESMA, the European Commission and the co-legislators are:
- A Level 1 fix, postponing for a few months the application date of some articles.
- A Level 2 fix, by fixing the applicability date, due to duly justified technical reasons, at a later moment than the applicability date of Level 1, with either one of two variants:
- Establish a fixed date (e.g. 3 January 2018).
- Establish a relative date with respect to another public and recognisable event.
- A Level 3 fix, which would consist of agreeing between all NCAs, and publishing at ESMA level, an implementation date that would be later than the one contained on the RTS/ITS.
The relevant ESMA Committees and the ESMA Board have discussed this note and have a strong preference for a Level 1 solution.