It is looking increasingly likely that the planned overhaul of the European regulatory framework under MiFID II and MiFIR is to be delayed for a year or even longer.
Rumblings started in early November last year with a speech by Stephen Maijoor, the head of the European super-regulator ESMA, in which he indicated that timings for stakeholders and regulators to build and implement IT systems were very tight and even unfeasible in certain cases.
Mr Maijoor said to Reuters that he expected the decision to delay would be settled in a few weeks, although he warned that a one year delay may not be long enough if the EC takes too long to sign off the ESMA Regulatory Technical Standards which are currently in draft.
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It is still not clear whether any delay would be for all or just part of MiFID, as this would be a political decision according to Mr Maijoor. It is our view that Mr Maijoor’s comments may also have an element of political maneuvering to try to get EC to come out and make a decision on the issue as both regulators and trade bodies are looking for clarity.
An FCA roundtable last week highlighted the confusion in the industry caused by the uncertainty, and warned that smaller firms might be falling back in their preparations. The FCA noted the importance of keeping the momentum going, despite the potential delay and said it was considering how it could best communicate that to market participants.