MiFID II to be Delayed by One Year; European Commission Blames Technology
10 February 2016
10 February 2016 - The European Commission today officially proposed a one-year delay to the revised Markets in Financial Institutions Directive (MiFID II).
Michael Thomas, partner in Hogan Lovells Financial Institutions Sector, said:
"It's a relief to have details of the Commission's proposal for timing of MiFID II, but the industry is still in the dark regarding much of the detail in the rules themselves. The Commission has cited problems with complex technology, especially between ESMA and the trading venues, as the reason for the delays, but the fact is that the Commission has delayed the Level 2 technical standards and delegated acts for months. It's not obvious that all of these delays are linked to technology, especially where the delays relate to rules on investor protection."
The Commission's announcement states that most of the provisions in MiFID II will now take effect from 3 January 2018. This is a one-year delay compared with the original timetable. This will have a knock-on effect on other timings in the MiFID II Directive and its associated Regulation, the Markets in Financial Instruments Regulation (MiFIR).
The reason given by the Commission for the delay is the complex technical infrastructure that needs to be set up for the MiFID II package. In particular, the European Securities and Markets Authority (ESMA) will be required to collect data from about 300 trading venues in relation to about 15 million financial instruments.
Notes for editors:
On 10 February 2016, the European Commission officially proposed a one-year delay to the revised Markets in Financial Institutions Directive (MiFID II). For its announcement, see here.
At present, the text of the MiFID II Directive states that it will take effect from 3 January 2017. The Commission's proposal would mean that the implementation of MiFID II is delayed until 3 January 2018.
The Commission proposes that the timetable will be amended by a new Directive and a Regulation to amend the MiFID II Directive and MiFIR respectively. These will need to be adopted by the European Council and the European Parliament.
For further details on MIFID II, please visit the Hogan Lovells dedicated microsite at http://www.hoganlovells.com/mifidii/.
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