Members of the European Parliament decamp to Strasbourg this week for the final plenary session of the seventh legislature. The pressure is on legislators to wrap up as many open dossiers as possible and the plenary agenda is packed. The attention of most in the financial services sector will be on two such open dossiers – the Bank Recovery and Resolution Directive (BRRD) and the recast Markets in Financial Instruments Directive (MiFID 2) and the new Markets in Financial Instruments Regulation (MiFIR). These dossiers share little in the way of scope or provisions but both are far-reaching, contentious and have been the subject of much industry lobbying to date. Both also delegate substantial powers to the European Commission on implementing measures. For both, formal adoption of the primary legislation is less the beginning of the end than the end of the beginning of the policy making process.
The implementation process does not formally begin until legislation is adopted. Behind the scenes the implementation process has already begun as the European supervisory authorities, short on time and resources, look to get a head-start on implementation and tackle the most complex and challenging implementing measures. This has been particularly true for the MiFID 2 and MiFIR proposals. The European Securities and Markets Authority (ESMA) has listed 106 separate implementing measures for these two proposals alone, more than half of which are due within 12 months of entry into force of the legislation (June 2015). To deliver these measures, ESMA and national regulators have innovated within the bounds of the implementation process. ESMA has extended the remit of working groups and work streams, quickly constituted new groups and contracted external support for data analysis and impact assessments. National regulators have assisted through discreet engagement and information exchanges with market operators and market participants.
These and other innovations create new opportunities to shape implementing measures. In addition to the formal channels for consultation with industry, the more sophisticated can and will use informal contacts with key national regulators, analysis and data submissions, exchanges between national regulators and other means to define the debate and focus key regulators on the main problems in implementing measures and prospective solutions to those problems. This activity will be most evident on implementing measures for those MiFID 2 provisions capturing activities and persons for the first time. Such activity will also be most acute on key implementing measures for some of MiFIR’s controversial market structure provisions. The more sophisticated have learned the lessons of the Alternative Investment Fund Managers Directive and the European Markets Infrastructure Regulation and see there is much to play for through the implementation process.
View Plenary sessions 14 – 17 April 2014, 15 April 2014