Brussels, 10/02/2016 (Agence Europe) - On Wednesday 10 February, the European Commission proposed a one-year extension - from 3 January 2017 to 3 January 2018 - of the date on which the revised directive on the Markets in Financial Instruments Directive (MiFID II) enters into force.
“The reason for the extension lies in the complex technical infrastructure that needs to be set up for the package to work effectively” and has also been proposed “in order to avoid legal uncertainty and potential market disruption”, the European institution explained in a press release. Under the directive, the European Securities and Markets Authority (ESMA) has to collect data from about 300 trading venues on about 15 million financial instruments. According to ESMA, however, neither the competent authorities nor the market participants will have the necessary systems ready by January of next year.
“Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II (…). Meanwhile, we are pressing ahead with the level II legislation to implement MiFID II and expect to announce those measures shortly”, said the Commissioner for Financial Services, Jonathan Hill.
In November 2015, the 'economic and monetary affairs' committee of the European Parliament took position in favour of this postponement, as long as it has no impact on the presentation of the implementing measures of the legislative package (see EUROPE 11440).
The 'MiFID-MiFIR' legislative package aims to increase the transparency of the financial markets, particularly by requiring the trade in standardised derivatives to take place only through regulated stock markets (see EUROPE 10997). High-frequency trading (HFT) will be subject to new prudential rules by means of controls on sales and an appropriate liquidity requirement for operators applying a market-making strategy. States will be able to bring in limits on net positions (but not on entire contracts) held by investors on commodity derivatives (wheat, soya, sugar), given the potential impact of these on price-setting. (Original version in French by Mathieu Bion)