This week, financial institutions across Europe reacted with mixed frustration and relief (but, in each case, perhaps without surprise) to reports that MiFID II (Directive 2014/65/EU), or parts of it, could be delayed. The announcement followed a speech by Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA), to the ECON Committee (part of the European Parliament) on 10 November 2015.
By way of recap, the update to the Markets in Financial Instruments Directive, Europe's overarching framework of financial services rules, is due to be transposed by Member States in July 2016 and take effect from January 2017.
During his speech Mr Maijoor acknowledged that the time afforded under the implementation calendar to implement the rules (yet to be finalized by ESMA) and build the necessary IT systems to deal with transaction and position reporting under MiFID II was extremely tight, and in a few areas, unfeasible. Mr Maijoor stated that ESMA has raised timing issues with the European Commission and questioned whether a legislative response is required to delay certain parts of MiFID II (in particular transparency, transaction and position reporting).
The European Commission apparently shares ESMA’s concerns and accepts that a delay may be necessary. The scope and duration of the delay (if any) is to be determined, but Martin Merlin of the European Commission has said 'the simplest and most legally sound approach would be to delay the whole package by one year'.
The story continues….