Another day – another MiFID 2 delay

To the surprise of no-one but the terminally optimistic, ESMA chair Steven Maijoor has indicated that the requested one year delay to MiFID 2 may not be sufficient. In conversation with Reuters at the Asian Financial Forum in Hong Kong, Mr Maijoor underlined that the MiFID 2 ball is in the politician’s court:

“I am optimistic there will be a delay. It’s very important for market participants and all of us to know. I would expect that this would be settled in a few weeks. But whether it’s a year, or shorter or longer, or whether it’s for all of Mifid or only a part of Mifid, that’s really a political decision.”

In a thinly-veiled warning that the serve is still to be returned, Mr Maijoor clarified:

“”We suggested a year delay but that assumes a relatively speedy endorsement of all the technical standards. The final making of these IT systems can only really start once these technical standards are finally set, and that requires that these are endorsed by the Commission and also accepted by the Parliament and Council. If that process is lengthened too much then a year might not be sufficient.”

The Commission is yet to propose the one-year delay requested by ESMA in October 2015, a proposal that to take effect and alter MiFID 2’s start date, must be approved by the Parliament. A related issue involves the endorsement by the Commission and acceptance by the Parliament and Council of the MiFID 2 second set of RTS and ITS. Mr Maijoor’s point being that if this does not occur soon, even a one year delay will be too short.

Unfortunately, once the delay genie is out of the bottle further deferments become all too easily possible, particularly if constituent parts become differentially phased in. Mifid 2 was already a byword for postponement and political wrangling even before it was passed in broadly “final” form, it would be foolhardy to bet against further delays and delays to delays.

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