The European Commission has responded to the European Securities and Markets Authority’s (ESMA) request to postpone the compliance deadline of Markets in Financial Instruments Directive II (MiFID II) with a proposal for a one-year extension of the deadline to 3 January 2018.
While the proposal, which must be approved by the European Parliament and EU member states, could give financial firms some relief in the run up to compliance, it does not explicitly change the 3 July 2016 deadline for member states to transpose the EU regulation into national law. This problem is confounded by the fact that ESMA’s latest Regulatory Technical Standards, published in September 2015, have not yet been approved by the Commission and continue to cause uncertainty in the market about how the regulation’s rules should be implemented.
Despite the uncertainty and the Commission’s proposed postponement of MiFID II, industry experts speaking at last week’s A-Team Group Intelligent Trading Summit in London made it clear that the extensive challenges of MifID II mean firms must continue implementation programmes using all available information from ESMA whatever the compliance deadline.
The Commission stated that the postponement would ‘take account of the exceptional technical implementation challenges faced by regulators and market participants’. Jonathan Hill, commissioner for financial services, Financial Stability and Capital Markets Union, expanded on this, saying: “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.”