Wednesday May 18 2016

News Source: Fund Regulation

Focus: MIFID and MIFIR

Type: General

Country: European Union




The European Council has approved an agreement with the European Parliament on a one-year delay to new securities market rules.

The one-year postponement of the transposition and application dates will affect the provision of services for investments in financial instruments and the operation of regulated financial markets. Provisional agreement was reached with the European Parliament on 2 May 2016, and a regulation will now be adopted to enact the extension.

The rules consist of two legislative instruments:

  • regulation 600/2014 (“MIFIR”), aimed at improving transparency and competition of trading activities by limiting the use of waivers on disclosure requirements and by providing for non-discriminatory access to trading venues and central counterparties (CCPs) for all financial instruments, and requiring derivatives to be traded on organised venues;
  • directive 2014/65/EU (“MIFID II”), amending rules on the authorisation and organisational requirements for providers of investment services and on investor protection. The directive also introduces a new type of trading venue, the organised trading facility (OTF). Standardised derivatives contracts are increasingly traded on these platforms, which are currently not regulated.

Under the approach agreed with the European Parliament:

  • the deadline for the member states to transpose MIFID II into national legislation will be set for 3 July 2017;
  • the date of application of both MIFID II and MIFIR will be set for 3 January 2018.

Both the directive and the regulation were to become applicable 30 months after entry into force, i.e. as of 3 January 2017, with member states having to transpose the new directive by 3 July 2016. However, due to technical implementing challenges faced by the European Securities and Markets Authority (ESMA) and by national competent authorities, essential data infrastructures will not be in place by 3 January 2017.

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