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MiFID II: the Current State of Play

On 25 February 2014, the European Securities and Markets Association (ESMA) published a speech by Verena Ross, Executive Director at ESMA, on new financial market regulation.

Ms Voss touched upon such subjects as the concept of “liquidity” in the context of bond and derivative markets, micro-structural issues such as mechanisms to manage volatility and the increasing operational role for ESMA in future years.

However, the most relevant part of her speech related to MiFID II implementation, an initiative which she described as “the most significant project for ESMA this year” and in relation to which ESMA is required to develop approximately 100 technical standards or advice.  Where ESMA is required to develop technical standards, Ms Voss confirmed that it intends to publish a discussion paper and hold a public hearing on the key strategic elements soon after approval of the MiFID II text by the EU Parliament, with a view to publishing a formal consultation paper “later in the year/early next year”.

Ms Voss also referred to the letter sent on 14 February 2014 by ESMA to the EU Commission requesting clarification of the scope of MiFID and EMIR with respect to the definitions of foreign exchange forwards and physically settled commodity forwards (see this blog post for more detail).  She confirmed that, in the interim, ESMA will not enforce EMIR requirements in relation to those contracts.

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