MiFID II Potentially Delayed by 12 Months
10 November 2015
10 November 2015 - The European Commission today confirmed that it is considering a 12-month delay to the implementation of the revised Markets in Financial Instruments Directive (MiFID II), following concerns raised by the EU's markets regulator regarding the "extremely tight" timetable for MiFID II.
Michael Thomas, partner in the Hogan Lovells financial institutions group, said:
"Up until now the European institutions have been consistent in stating that the January 2017 deadline for MiFID II implementation would be met. However, the industry has been increasingly vociferous in calling for a delay, especially over the last couple of months. ESMA has now bitten the bullet, by recognising that it's not just investment firms, but also the regulatory authorities, who will struggle to get their systems ready in time for January."
Steven Maijoor, the chair of the European Securities and Markets Authority (ESMA), told a meeting of the Economic and Monetary Affairs Committee (ECON) this morning that the timing for the implementation of MiFID II would be "extremely tight". According to Maijoor, there are some areas of MiFID II where "the calendar is already unfeasible".
In his speech to ECON, Maijoor stated that delays to the finalisation of regulatory technical standards mean that some of the IT systems that are required for the implementation of MiFID II will not be ready by January 2017. He acknowledged that ESMA itself faces significant challenges in building a "substantial" IT system to compile a list of all financial instruments traded in the EU.
According to Maijoor, ESMA has raised with the Commission the possibility of delaying certain parts of MiFID II, mainly related to transparency, transaction reporting and position reporting. A spokesman for the Commission has separately confirmed that its preliminary view is that a delay to the implementation of MiFID II may be necessary.
Notes for editors:
At present, the text of the MiFID II Directive states that it will take effect from 3 January 2017.
Steven Maijoor, chair of ESMA, made a statement to ECON on Tuesday 10 November regarding potential delays to the implementation of MiFID II (see here).
Amendments to the text of the MiFID II Directive will have to follow the EU legislative process, which will require agreement between the European Commission, the European Parliament and the Council of the EU, followed by a vote in the European Parliament and adoption by the Council.
For further details on MIFID II, please visit the Hogan Lovells dedicated microsite at http://www.hoganlovells.com/mifidii/.
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