• MiFID II delay: The European Parliament’s MIFID II team of the European Parliament (EP) issued a statement on 27 November 2015 to the effect that they would accept a one year delay in the application of MiFID II if the European Commission (the Commission) took into account their considerations and moved quickly to implement the legislation. The Commission is expected to publish later in January 2016, or even February 2016, a formal proposal to defer the application date to 3 January 2018. Meanwhile there are delays in the Commission’s adoptions of regulations (delegated acts and regulatory technical standards (RTS)) following the final reports sent to the Commission by the European Securities and Markets Authority (ESMA) in 2014 and 2015. These regulations, which will address such points as scope of commodity derivatives covered by MiFID II, the ancillary activities exemption and position limits, as well as governance, conduct and reporting issues, are not expected until February/March 2016.
  • UK MiFID II implementation – FCA consultation: On 15 December 2015, the UK’s Financial Conduct Authority (FCA) launched the first of two consultation papers on changes to its Handbook of Rules and Guidance to reflect and implement MiFID II. This consultation focuses on markets, in other words FCA’s regulation of the secondary trading of financial instruments, and will remain open until 8 March 2016. It covers mainly trading venues (RMs, MTFs, OTFs, SIs), transparency, market data, and algorithmic and high frequency trading requirements, but also passporting and UK branches of non-EEA firms, extending more of the FCA’s Principles for Businesses to business with eligible counterparties, and Perimeter Guidance, on scope issues.
  • Position reporting requirements: On 11 December 2015, ESMA published another MiFID II Final Report covering, amongst other items, reporting (including commodity derivatives position reporting), cooperation and suspensions. The European Commission has three months, extendible by another month, to review this Final Report and decide whether it will endorse the draft implementing technical standards (ITS) contained in it. ESMA notes much work remains to be done to give market participants sufficient certainty to build their internal systems for position reporting, and intends to release additional guidance following publication of the relevant technical standard.
  • Assessment of individual knowledge and competence: On 17 December, ESMA published its Final Report on guidelines for the assessment of knowledge and competence of individuals who on behalf of investment firms authorised under MiFID II will give investment advice to clients or provide information to them about financial instruments, investment services or ancillary services.
  • Reporting and records: On 23 December 2015, ESMA issued a consultation paper in respect of Level 3 guidance to complement and ensure consistent implementation of MiFIR technical standards on transaction reporting, reference data, order record-keeping and clock synchronisation. The consultation is open for comment until 23 March 2016.
  • Indirect clearing: See below under “EMIR” regarding ESMA’s consultation on indirect clearing under MiFIR and EMIR.