The length and scope of any delay to the current implementation deadline of January 2017 continues to be debated by European Union (EU) officials. Meanwhile, the Level 2 Delegated Acts are reportedly close to final and European Securities and Markets Authority (ESMA )is now consulting on Level 3 technical guidance to underpin certain of the Level 2 Technical Standards relating to transaction reporting and market data requirements. Some Member States are beginning to consult on how the Directive will be transposed into their countries’ laws, but most appear to be waiting for the Level 2 measures to be finalised.
Readers will recall that at a meeting of the European Parliament’s Economic and Monetary Affairs Committee in November last year, the ESMA Chair, Steven Maijoor, described the difficulties faced by ESMA and the national regulators in building systems to cover reference data, transaction reporting, transparency parameters and publication, and position reporting, by the implementation date of January 2017. Also, certain of the capital markets related technical standards were proving difficult to finalise. He therefore called for a delay to the implementation date. The Commission recognised these difficulties and suggested it would be best to delay the whole package by one year (i.e. not just the provisions relating to the areas mentioned by ESMA), but Parliamentary Committee members expressed concerns about a blanket delay.
The four institutions – the European Parliament, the Commission, the Council and ESMA – have since been in discussions and no clear signal as yet to emerge as to the length and scope of the delay. We shall continue to keep a watching brief and recommend that firms continue with their implementation work, not least because any delay will, in effect, simply give back to firms the lead time that they need to develop or build their own systems.
Meanwhile, the Commission has continued to finalise the Level 2 Delegated Acts, as advised upon by ESMA in December 2014. We understand that these measures will not all take the form of a Regulation (as expected), but that some will be issued as a Directive, allowing Member States a little leeway in their implementation. It is also expected that the measures will, in substance, largely reflect the advice given by ESMA, but that there will be some changes in the provisions on inducements, for example.
It is expected that the Level 2 measures will be made publicly available within the next few weeks. The Parliament and the Council then have a period formally to consider the rules, although they will have already input their views.
Just before Christmas, ESMA published a Consultation on guidelines on transaction reporting, reference data, order record keeping and clock synchronisation under Markets in Financial Instruments Regulation (MiFIR). This Level 3 guidance underpins the Level 2 Technical Standards and is intended to facilitate consistent implementation of MiFIR across Europe. The draft guidelines: specify individual scenarios applicable to a given transaction reporting activity; specify scenarios applicable to specific order record keeping activities; provide a number of clarifications on the application of the MiFIR Technical Standards (as requested by industry during the consultation process); and provide guidance on the application of the MiFIR clock synchronisation rules.