Yesterday saw several reports that the European Commission are likely to request a delay in the implementation of MiFID II by up to a year, to January 2018. Steven Maijoor, chair of ESMA, also gave a statement at ECON, the Economic and Monetary Affairs Committee of the European Parliament, which can be found here. There are a few points to note for those in the commodities and energy sector:
Firstly, it is acknowledged that there is a general acceptance of the large order of magnitude of implementing MiFID inside 14 months. This is highlighted in the part of the speech about position limits and reporting and supports at least a partial delay in such difficult topics. However, there is also a further defence of the proposed changes to the calculations and thresholds required for an exemption due to ancillary activity, which has been the topic of much controversy.
There has been a great deal of lobbying against these rules, including by EFET who have launched this web site. Now the that final drat RTS has been published by ESMA it remains to be seen if this lobbying will have any effect on the approval of the rules. Indications from several are that regulators are keen to cover the commodity trading sector.
There have been many further articles regarding the MiFID II possible delay, including this one on the FT website as well as this blog post from Baringa. In the event that there is a delay, given the order of magnitude of the task ahead, it would be unwise to lose momentum of any MiFID work initiated, or to delay it any further. While it is the case that the “denominators” in the threshold calculations are not known, and that the rules are not finalised, the proposed delay tells the market that the compliance task is even larger than thought earlier.