The European Commission has published correspondence between it and the European Securities and Markets Authority (ESMA) and the European Commission have been circulated to industry groups this afternoon indicating that formal submission of most MiFID 2, MiFIR and all MAR technical standards will be delayed until “end of September”. The current legislative deadline for formal submission of the technical standards is 2 July 2015.

The correspondence between ESMA Chair Steven Maijoor and DG FISMA Director General Jonathan Faull and dated 11 May 2015 states that the delay is necessary to allow the European Commission services to conduct an “early legal review” of the draft technical standards before formal submission. This review is intended to “ensure the legality and legislative quality” of technical standards. The review will allow the Commission to flag legal concerns with ESMA and other supervisory authorities before board approvals.

The Commission is understood to be seeking early legal reviews of other legislation including the Central Securities Depositories Regulation (CSDR) and the UCITS V Directive. If agreed, such a review would also delay formal submission of CSDR technical standards beyond the deadline in that legislation (18 June 2015).

In practical terms, the legal review and delay will allow the Commission and ESMA time to craft technical standards to implement complex and impractical provisions in both the MiFID 2 and MiFIR legislation. The legal review and delay will also give industry additional time and opportunity to push the Commission on compromises in the technical standards.