Pressure is mounting on the European Commission to postpone the implementation of securities market reforms under MiFID II by a year, as banks and brokers struggle to adapt their IT systems to meet the 2017 timetable.
Earlier calls by industry bodies such as the Investment Association to postpone the mammoth overhaul by a year now appear to be receiving a sympathetic response from rule makers, more so given the delayed introduction of technical standards by the European Securities and Market Authority in September.
Speaking to the European Parliament's economic affairs committee, Esma chairman Steven Maijoor described the January 2017 timetable as "unfeasible", given the scope of the changes needed in market participant's IT shops. Particular areas of concern were around the building of transaction and position reporting systems, for which the final technical rules have yet to be published.
Michael McKee, Partner at DLA Piper, the global law firm, welcomed the comments: "Delaying the implementation date for MiFID II would be a welcome recognition of the fact that it will not be practicable for much of the technology and reporting to be put in place by 3 January 2017, particularly given that neither the RTSs, nor the implementing measures at EU level are yet finalised."
Maijoor's words have also been echoed by Commission FS director Martin Merlin, who told the committee that an extension of the deadline was advisable to ensure a smooth implementation.
The Level 1 MiFID II legislation doesn’t provide for any delay to implementation - leaving EU lawmakers with a difficult choice over whether to introduce the reforms in a piecemeal fashion, or to move the whole process back by another year.
Merlin's advice to the Commission: "The simplest and most legally sound approach would be to delay the whole package by one year."