10 November 2015 – MiFID II is due to come into force on January 3, 2017. However, the European Commission told MEPs this week that a delay is needed “if we want to have a smooth and effective implementation”.
MiFIDII contains the updated rules for markets in financial instruments. Some of the provisions in this legislative package require complex IT systems to be built by regulators and industry. It is now said there will not be sufficient time to develop these systems because the Regulatory Technical Standards (RTS), in which the details of the relevant MiFID II provisions are worked out, are not completed according to schedule.
The EC is suggesting a delay of the whole package of as long as one year. European Investors would like to emphasize that:
i) The investor protection measures laid down in MiFID II (e.g. on inducements and total transparency of costs) are not dependent on complex IT systems. It is therefore not necessary to delay the whole package, but only certain articles or RTS.
ii) The length of the delay (of certain articles or RTS), if inevitable, should be kept to the absolute minimum.
iii) The delay should not water down the substance of MiFID II. MiFID II contains pivotal investor protection measures that should not be diluted further.
Update: On 8 February, the European Commission proposed a one-year delay of the implementation date. The ECON Committee is expected to vote on the delay on 16/17 March.