Last week, February 10, the European Commission announced a proposal to delay the MiFID market reforms for one year, setting the new deadline for January 2018. The European Commission is Europe’s top regulator and the executive arm of the European Union.
This announcement comes after the European Securities and Markets Authority (ESMA) informed the European Commission that necessary systems would not be ready by 3 January 2017, the original deadline date. The extension is meant to prevent market disruption in light of the delays cited by ESMA.
"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." Jonathan Hill, Commissioner for Financial Services, Financial Stability and Capital Markets Union said.
The proposed extension will give European regulators and financial firms an additional year to comply with the rules presented in the revised Markets in Financial Instruments Directive, commonly referred to as MiFID II. MiFID II, is a set of reforms conceived after the financial crises, meant to stabilize the European markets. The reforms outlined in MiFID II will impact all aspects of how securities and commodities are traded in Europe, from derivatives trading to bond pricing.
While an extension gives firms and authorities time to prepare technical requirements, legislation pushes ahead. “This extension will not have an impact on the timeline for adoption of the 'level II' implementing measures under MiFID II/MiFIR. The European Commission will proceed with their adoption irrespective of the new date of entry into application of MiFID II. This will provide legal certainty for the new provisions,” according to the press release from the European Commission.
More insight into MiFID 2
Press Release from European Commission