On 10 February 2016, the Commission has proposed a one-year extension for the entry into force of the revised Markets in Financial Instruments Directive, i.e. MiFID II.
Given the previous statements by ESMA Chairman, Steven Maijoor and MiFID II Rapporteur, Markus Ferber, the proposed extension does not come as a surprise.
The reason for the extension is that the initial deadline did not allow the competent authorities or market participants to have the complex technical infrastructure ready, which is needed in order to achieve an effective working of the MiFID II package. To avoid legal uncertainty and potential market disruption, an extension was deemed necessary. However, the extension will not have any impact on the timeline for adopting the ‘level II’ implementing measures under MiFID II/MiFIR.
As Jonathan Hill, Commissioner for Financial Services, Financial Stability and Capital Markets Union said: ‘Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II. We will therefore give people another year to prepare properly and make the necessary changes to their systems. Meanwhile, we are pressing ahead with the level II legislation to implement MiFID II and expect to announce those measures shortly.’
The proposed extension will have to be formally ratified by Parliament and the Council, which is not expected to cause any issues. The new deadline for the entry into force is 3 January 2018.