The European Commission has confirmed a widely anticipated one-year delay to the revised Markets in Financial Instruments Directive, giving market participants more time to prepare for implementation.
Financial firms must now implement the framework by January 3 2018, the European Commission said on its website, citing “exceptional technical requirements.”
More time is needed to allow regulators and banks to prepare systems and avoid legal uncertainty and potential market disruption, the Commission said.
The EU’s European Securities and Markets Authority had called for a delay.
“Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II,” said Jonathan Hill, Commissioner for Financial Services, Financial Stability and Capital Markets. “We will therefore give people another year to prepare properly and make the necessary changes to their systems.”
MiFID encourages trading on regulated platforms and introduces new pre- and post-trade requirements aimed at boosting transparency and oversight of financial markets, including derivatives. It also aims to increase competition in clearing and toughen up conduct requirements.
EU member states and parliament must approve the proposed delay, and some lawmakers have said they would back a postponement in return for changes to some rules.
France, Germany and the UK have raised concerns that too much transparency in bond markets could cause some investors to pull out and harm already stretched market liquidity.
