Markets breath a sigh of relief as tough new regulation, MiFID II, is delayed

Billy Bambrough
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Jonathan Hill, commissioner for financial services, financial stability and capital markets union, said Mifid II has been delayed due to "the complexity of the technical challenges" (Source: Getty)

Finance firms have been given another years breathing room from a regulatory overhaul of trading rules.

The European Commission has proposed a delay of the Markets in Financial Instruments Directive, known as MiFID II, by a year.

The new deadline is 3 January 2018, from 3 January 2017 previously.

In November last year the commission said it was considering holding the regulatory change back.

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 major overhaul of financial standards will cover everything from from how market research is funded to the transparency of bond markets but has faced multiple delays due to complexity of the industry and slower than expected IT upgrades.

The announcement has been welcomed by the industry.

Bobby Johal, managing consultant at regulatory advisor Cordium said:

This announcement is the clarity that the industry has been waiting for. It’s important that firms take advantage of this extra time to get the necessary systems and processes in place, rather than delay their response. In a poll of asset manager compliance officers conducted at our annual conference last week, 75 per cent of delegates said their MiFID II plans were on hold, pending this clarity. At the same event, a number of issues were highlighted as being of specific concern – including those which require both process and IT infrastructure changes. Transaction reporting was one such example, with more than 80 per cent of respondents relying upon counterparties for some or all of their reporting.

Farid Anvari, legel counsel for Baker & McKenzie Structured Capital Markets said: "Many market participants will welcome this delay. Some of the requirements of MiFID II will have a considerable impact on market structures and even with a 12 month delay firms will be very busy trying to ensure compliance."

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