A delay in the implementation date for MiFID II has been widely anticipated for some time now (see earlier RegZone reports of December and November). On 10th February the European Commission finally confirmed its agreement to a one year delay to the full MiFID II package (i.e. both to MiFID II and to MiFIR) by making formal proposals to delay application until 3rd January 2018. The formal proposals come in the form of an amending Directive and Regulation which are yet to be adopted by the co-legislators (the Council and Parliament) but are likely to be fast-tracked.
In the press release, Jonathan Hill said –
"Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II. We will therefore give people another year to prepare properly and make the necessary changes to their systems. Meanwhile, we are pressing ahead with the level II legislation to implement MiFID II and expect to announce those measures shortly."
The Commission notes that the extension to the application date for both instruments is the result of technical implementation challenges met by ESMA which were of such magnitude that essential data infrastructures will not be in place in time for the original application date of 3rd January 2017. It also notes that the extension will be strictly limited to what is necessary to allow the technical implementation work to be finalised.
The press release says that the delay will not impact the timetable for the adoption of the level II implementing measures. These are keenly awaited by the industry and have already been the subject of considerable delay. Official publication of the final drafts will hopefully take place in the coming weeks.
Importantly, and despite substantial lobbying by various Member States (including the UK), the Commission has not proposed a delay to the date for adoption and transposition of MiFID II into national legislation, meaning that the cut-off date for transposition remains 3rd July 2016. With the existing delay in the publication of the Delegated Acts and RTS, timelines will be extremely tight for national legislators/regulators.
The change in the date of applicability of MiFID II will however have a knock-on effect for MAR and CSDR. Effectively, in order to ensure legal certainty for the period between the originally foreseen and the new MiFID II application date it will be necessary to clarify in the relevant Regulations that MiFID I rules and concepts will continue to apply until replaced by MiFID II as of 3rd January 2018.