On October 10, 2015, the European Securities and Markets Authority (ESMA) informed that the planned implementation timeline for MiFID II will not hold, asking the European Commission to allow for a delay. This announcement started a harsh debate between ESMA and the European Commission. However, on February 10, the European Commission proposed a postponement of MiFID II by a year, setting the new target date at January 3, 2018. Even if the European Parliament and the member states must formally approve the proposal, the event of a delay is now almost a certainty.
There is also an apparent risk for even further delay. The deadline to convert the EU rules into law has been set to July 3, 2016. Currently, the Regulatory Technical Standards are not endorsed by the European Commission (or accepted by the Parliament and the Council), nor have the Delegated Acts been issued. This leaves very limited time for regulators to transpose the Directive into national law.
Even if the Regulatory Technical Standards and the Delegated Acts will be in place ”soon”, the time allowed for the national lawmakers may prove too short. One reason is that these documents are not detailed enough to convert into law, as they still leave room for interpretation, e.g. regarding the proposed Double Volume Caps on dark pool trading.
There is definitely a need for an interactive process between the local Competent Authorities and the industry in order to get the national law in place. Additionally, a stated goal of ESMA is to “promote supervisory convergence” to ensure a level playing field. For this purpose, there will be a comprehensive Level 3 process, where all the 28 Competent Authorities need to work together to supply QAs and guidelines.
In essence, the issue today is not whether MiFID II be delayed, but how, and for how long. There are at least three probable scenarios:
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