On 21 March 2016, the European Securities and Markets Authority (ESMA) responded to the EU Commission’s letter of 14 March 2016 requesting it to redraft three regulatory technical standards (RTS). The draft RTS relate to:
- The application of position limits to commodity derivatives
- The criteria for establishing when an activity is ancillary to the main business
- Non-equity transparency
In its response, ESMA notes that unless the Commission states otherwise, it considers the Commission’s letter to contain all the intended amendments to the RTS and to also represent a formal notification under Regulation 1095/2010 to endorse the RTS once amended.
The requirement to redraft the RTS has led to further fears of more delays to the implementation of date of MiFID II. In January 2016, the Commission announced a delay to the implementation date granting national competent authorities and market participants one additional year to comply with the rules set out in the directive. The proposed new deadline is now 3 January 2018.
The Commission proposed the delay following ESMA’s concerns with regard to the tight timeframe to implement the directive and to build the necessary IT infrastructure systems. ESMA must collect data from circa 300 trading venues on about 15 million financial instruments, and work closely with national competent authorities and the trading venues themselves. However, ESMA informed the Commission that neither competent authorities nor market participants would have the necessary systems ready by 3 January 2017, the original operational date. In light of these technical implementation challenges an extension was considered necessary.
Although the Commission has stated that this extension would not impact on the timeline for adoption of the Level II implementing measures, it remains to be seen whether the requirement to redraft the RTS will lead to further delays.