MIFID II application date postponed to January 2018The European Commission has decided to extend the application date for MIFID II by one year. MIFID II is a directive that aims to bring in regulation in the trading of financial instruments. It consists of a Directive and a Regulation. As per earlier timelines, the European Member States had to transpose the Directive into national law by 3 July 2016. The Regulation was scheduled to apply as of 3 January 2017. The MIFID II system has to be implemented by the European Securities and Markets Authority (ESMA), the National Competent Authorities (NCAs) of each Member State and the stakeholders such as trading venues, regulated markets and investment firms. The technical challenges encountered during this stage are such that it would not be possible to apply the new rules by the beginning of 2017, hence the Commission has deemed it necessary to extend the timescale for application by a year, to 3 January 2018. This extension, however, will not affect the timeline for adoption of level II implementing measures, which are needed to provide legal certainty for the new provisions. For a proper implementation of MIFID II, there is a need to establish new data collection networks between trading venues, national regulators and ESMA. This new framework will require the trading venues and other market participants to provide national regulators with financial instrument reference data that describes, in a uniform manner, the characteristics of every single financial instrument subject to the scope of MIFID II. ESMA is already working to establish a Financial Instruments Reference Data System that will cover the entire range of financial instruments needed for reporting. All stakeholders will have to develop new IT systems that can accommodate the reporting needs for MIFID II. Kindly watch this space for more information on MIFID II, and on how your organization will need to adapt to meet the regulatory changes.
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