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ESMA gets MiFID II\MiFIR green light

The European Parliament has published its formal request to ESMA, asking for technical advice on the delegated and implementing acts of MiFIR and MiFID II. The request delineates which areas the technical advice will relate to: definition of derivatives contracts, conduct of business rules, organisational requirements, best execution, client order handling, and position management. The request also contains an indicative timeline: MiFID II\MiFIR to come into force June 2014, ESMA will provide technical advice by December 2014, delegated acts should be transposed by member states within 2 years of entry into force and should apply within 2 and a half years (30 months).

A word count of the draft MiFID II text shows ESMA 444 times as against the 589 uses of the word “financial” (unsurprisingly, the single most used term); the draft contains approximately 100 empowerments for ESMA to develop technical standards or advice. Technical advice relates to the adoption of delegated acts and is effected by the publication of a single consultation paper and public hearing. The development of technical standards is a more involved process: the publication of a discussion paper, a public hearing on the key elements, more detailed drafting, and a final consultation paper. The request’s deadlines are tighter than the usual 9 months for technical advice and 12 months for standards; while ESMA started preparatory work on MiFID II late last year, well in advance of its final approval, completion of such a challenging workload on a tight schedule will be challenging.

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