The deadlines for the second Markets in Financial Instruments Directive (MiFD) have been officially pushed back.
The delayed date for national implementation is set for 3 July 2017, with the actual application date for both MIFID II and the Markets in Financial Instruments Regulation (MiFIR) set for 3 January 2018.
The decision to push back the dates was agreed by the European Parliament and was approved by the EU’s Permanent Representatives Committee, on behalf of the EU Council.
Both the directive and the regulation were originally set to come into force as of 3 January 2017, with member states having until 3 July 2016 to transpose their directive law.
The EU Council blamed the delay on the technical implementation challenges of establishing essential data infrastructures by 3 January 2017.
“The new framework requires trading venues ... to provide competent authorities with financial instrument reference data that describes in a uniform manner the characteristics of every financial instrument subject to the scope of MiFID II.”
“In order to collect data in an efficient and harmonised manner, a new data collection infrastructure must be developed. This obliges the European Securities and Markets Authority (ESMA), in conjunction with competent national authorities, to establish a data system covering a wider range of financial instruments, given the extended scope of MiFID II.”
ESMA first alerted the EU Council that a delay to MiFID II and MiFIR was “unavoidable” in October 2015 when it suggested that “neither competent authorities nor market participants will be in a position to apply the new rules on 3 January 2017”.
“This would lead to legal uncertainty and potential market disruption,” ESMA explained.
MiFIR, when it eventually comes into force, aims to improve transparency of and competition in trading activities by limiting the use of waivers on disclosure requirements and by providing for non-discriminatory access to trading venues and central counterparties for all financial instruments, and requiring derivatives to be traded on organised venues.
MiFID II will amend rules on the authorisation and organisational requirements for providers of investment services and on investor protection.
The directive also introduces a new type of trading venue, the organised trading facility. Standardised derivatives contracts are increasingly traded on these platforms, which are currently not regulated.
