ESMA has written to the Commission setting out areas of MiFID 2 that it thinks will in practice be challenging or impossible to have in place by the current “go-live” date. It has noted several requirements that will involve IT development by both regulators and market participants, many of which are dependent on others. The requirements, on (i) reference data, (ii) transaction reporting, (iii) transparency parameters and publication and (iv) position reporting, are contained in the Level 1 text, to be embellished in Level 2. According to the current timetable, the earliest the MiFID Level 2 measures that ESMA sent to the Commission at the end of September will appear in the OJEU, after Commission, EP and Council approval, is March 2016 – and this assumes the fastest possible timetable. This would leave only nine months before 3 January 2017, when the majority of MiFID 2 is to be implemented into and operational in the laws of Member States. ESMA advises the Commission that this period is way too short. In the course of the last couple of months, it has become evident to ESMA and national regulators that it will not be feasible to have those systems ready for 3 January 2017. Market participants, who will need to feed into those systems, are facing similar implementation challenges. ESMA says that some provisions could operate in the absence of all the market players and all authorities being ready. However, some others, because of their very nature, require a high degree of synchronicity. ESMA explains the problems and suggests some alternative methods for dealing with them, listing the pros and cons of each. It suggests:

  • a Level 1 “fix” by delaying the application date of certain requirements;
  • a Level 2 “fix” by fixing the implementation date of relevant requirements as later than the Level 1 date; or
  • a Level 3 “fix” whereby ESMA and national regulators agree an implementation date that is later than the one in the law.

ESMA explains how each fix has been used in the past and expresses its strong preference for a Level 1 fix. (Source: ESMA Writes to Commission on MiFID 2 Delays)