When addressing the Economic and Monetary Affairs Committee of the European Parliament earlier this month, the chairman of the European Securities and Markets Authority (ESMA), Steven Maijoor, discussed the MiFID II and MiFIR implementation challenges that were faced by both firms and regulators and whether certain parts of the new regime would have to be delayed.

ESMA has now published a note dated 2 October 2015 which covers the:

  • identification of possible delays in the expected real applicability of certain MiFID II and MiFIR provisions, especially those related to the development of IT systems (by both regulators and market participants) that need to interact;
  • reasons why those delays are hard to eliminate or manage; and
  • possible alternatives on how to tackle them, in a coordinated EU manner.

The note mentions that there are four areas where the complexity of the systems, their interaction and the need for a harmonised start date are especially acute. These four areas are the main concerns in terms of possible delays in the go-live dates:

  • reference data;
  • transaction reporting;
  • transparency parameters and publication; and
  • position reporting.

In terms of how any delay is handled from a technical and legal point of view the note covers three possible options:

  • a fix at Level 1, of the type that was previously used for MiFID I by postponing for a few months the application date of some articles;
  • a fix at Level 2, of the type that has been used on previous occasions by fixing the applicability date at a later moment than the applicability date set out in Level 1. This has been used, for example, to delay by 24 months the buy-in regime in the regulatory technical standards under the Regulation on central securities depositories; and
  • a fix at Level 3, of the type that several authorities already applied in 2006 when MiFID I came into force but their systems were not ready to implement it. This would consist of agreement between all Member State national competent authorities, and publishing at the ESMA level, on an implementation date that would be later than the one contained in the technical standards.

View ESMA note on MiFID / MiFIR implementation: delays in the go-live date of certain MiFID provisions, 2 October 2015