European Commission set to extend MiFID deadline again
19 October 2005 | 10343 views | 0
The European Commission is set to delay the implementation of its controversial Directive On Markets in Financial Instruments (MiFID) by a further six months.
The directive was originally due to come into force in April 2007, having already been delayed by a year to give financial firms more time to adapt structures and procedures to the new rules.
According to a Reuters report, Britain - which currently holds the rotating presidency of the European Union - will call for the deadline to be extended for a further six months to 1 November 2007 in order to give firms more time to prepare for the legislation and to avoid "any risk that the new timetable may not be met".
Member states are expected to meet on Friday to discuss the delay to the deadline, which is expected to be approved at a later date.
The new directive will enable banks to offer financial products across all 25 EU member states. Banks across the EU will be able to trade shares internally, off an exchange, but will be required to publish the prices of intended trades to the rest of the market beforehand.
But the new rules have been slammed by industry bodies including The European Banking Federation (FBE) which claims they are "too complex, cumbersome and restrictive" and by The Federation of European Securities Exchanges (FESE) which says the legislation "could have a detrimental effect on the transparency of initial public offerings (IPOs) as well as on the survival of smaller exchanges".
Earlier this year Sir Callum MCarthy, the head of the UK's Financial Services Authority (FSA), claimed the proposals would impose significant costs on the UK market and that it was "deeply unsatisfactory" that MifiD had not undergone a full cost-benefit analysis.
Analysts estimate that capital markets firms will be forced to spend up to EUR1 billion on technology in order to comply with the directive.