The European Commission has agreed to delay the implementation of the Markets in Financial Instruments Directive (MiFID) II by 12 months, moving the deadline to 3 January 2018.
The delay comes after ESMA warned that neither market participants nor competent authorities were likely to have the necessary systems for compliance in place by the original January 2017 deadline.
According to the commission, the decision took in to account the “exceptional technical implementation challenges” for all involved.
The new directive requires a technical and complex infrastructure that would allow ESMA to collect data relating to approximately 15 million financial instruments, from about 300 trading venues. This would involve working closely with national authorities and trading venues
However, in November 2015, ESMA chair Steven Maijoor said: “The timing for stakeholders and regulators alike to implement the rules and build the necessary IT systems is extremely tight. Even more, there are a few areas where the calendar is already unfeasible.”
The commission agreed said that the delay was “deemed necessary” because of “exceptional circumstances and in order to avoid legal uncertainty and potential market disruption.”
Jonathan Hill, commissioner for financial services, financial stability and capital markets union, said: "Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II. We will therefore give people another year to prepare properly and make the necessary changes to their systems. Meanwhile, we are pressing ahead with the level two legislation to implement MiFID II and expect to announce those measures shortly."
Originally, a 30-month timeframe was allowed between adoption and implementation of MiFID II rules, because of the complexity of the plans. According to the European Commission, the extension has been “strictly limited” to what is required in order to finalise the technical implementation work.
