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MiFID II delay and uncertainty now certain

The EP has today published an official statement accepting a one year delay of MiFID II’s entry into force. Penned by Markus Ferber, the Parliament’s Rapporteur for MifiD II and on behalf of its MiFID II negotiation team, the short statement proffers a conditional acceptance of delay:

“The European Parliament’s negotiation team has informed the European Commission that we are ready to accept a one-year delay of the entry into force of MiFID II. However, this only applies if the Commission finalises the implementing legislation swiftly and thereby takes into account the European Parliament’s priorities.”

The statement goes on to say that the Commission and ESMA ““need to come up with a clear roadmap on the implementation work and especially for setting up the IT-systems” and that the EP expects to be regularly and comprehensively informed about any progress towards implementation. The Negotiating Team’s offer is essentially repeated in a letter to Commissioner Hill, they are open to “considering a wholesale delay of the application of MiFID II- MiFIR, on two conditions”, namely that the Commission adopts the RTS as soon as possible, “taking utmost account of our remarks on their content” and that the Parliament is kept fully informed. The team’s remarks and concerns are published in another letter to Commissioner Hill, CC’ing ESMA, DG FISMA and the EU Presidency. The Parliament’s team is “deeply concerned” that the draft RTS is not fully in line with the co-legislative mandate and “are very disappointed that our concerns in three specific areas, namely in the areas of position limits, non-equity transparency and the ancillary activity exemption.” The letter urges the Commission to incorporate its recommendations “in order to prevent an objection by Parliament to the standards concerned”.

The publication of these three documents effectively sets the seal on a one year delay to the whole MiFID II/MiFIR package; while a deal would also have to be approved by the Council, the Parliament is now using its veto power to promote its own (justified) concerns. Given the very tight initial MiFID II timelines, the City is likely to be deafened by sighs of relief. While this latest and largest delay in a long line inevitably creates further uncertainty, the Parliament is to be applauded on its swift acceptance that the MiFID II emperor is a best underclothed.

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