The last few days has seen a continuation of activity and publications around the proposed delay to the implementation of MiFID II. This article on the Reuters website reports an EU official as seeing the need for a delay.
Today Europex issued this press release, also calling for the delay. In addition to giving the usual delay justifications, such as the difficulty in introducing functioning position reporting systems in time, Europex have called for the RTS to be finalised as soon as possible, and also for the market sizes to be published. They urge a clear and sensible definition of “financial instrument” (as defined by Annex I Section C of MiFID) and highlight the danger of too narrow a definition, which could cause an unwanted shift to physical instruments. They also call for the data period on which calculations for the ancillary activity test are to be performed to be 2017, i.e. the year running up to the proposed new date of introduction. The justification is that such a move gives companies time to re organise their activity before the tests are introduced. The downside of this arrangement is that it is difficult to calculate the numbers based on all of 2017 data and then be ready for 3 January 2018. Europex’s stance on MiFID II has been to argue for a fitting “Commodity Dealer” regime within the rules, rather than to argue that the rules should not apply at all to the sector.
Navigant Consulting have issued this paper on MiFID II, written by Gajan Sritharan. The paper is written based on a survey of market participants, and divides them up into several categories:
– Unlikely to be impacted – and who may take advantage of this fact in future business.
– Fully embracing the rules – and embedding a “compliance culture” throughout.
– Looking to pro-actively minimise the impact – by organisational change and other mechanisms.
– Waiting for the final rules – before carrying out any serious activity – and who wish to minimise impact.
Until a delay, and its shape, is confirmed, the general approach of the market has been to assume that there will be none. Even if a delay occurs, the lesson to learn is to make good use of any extra time available to properly prepare. The vibe from the regulators is that if a new date is set, there will be no further changes.