Executive Summary
On 10 February 2016, the College of Commissioners officially announced its final position concerning the delayed entry into force of the revised Markets in Financial Instrument Directive ("MiFID II/MiFIR"). As anticipated, the one-year delay will apply to the package in full, leaving a more realistic timeline to "take account of the exceptional technical implementation challenges faced by regulators and market participants" as stated by the European Commission.
In the course of April 2016, the European Commission has adopted the MiFID II Delegated Directive covering investor protection, and the MiFID II Delegated Regulation covering organisational requirements and operating conditions for investment firms. Generally, the published delegated acts confirmed the high regulatory maturity of several subjects but we are still waiting for the totality of level 2 measures and potential further clarifications. The Commission has notably taken its final position on some critical topics as costs & charges, target market definition and the independent advisory model. Therefore, given the regulatory maturity of most subjects, it is already possible to start the implementation process.
On that basis, we believe that the one-year delay should not lead investment firms to delay the MiFID II implementation project:
- For those which have already initiated the project, maintaining their momentum will allow them to leverage the project team and knowledge already acquired while planning the important IT developments over two years instead of one
- Additionally, delaying implementation would leave more time to take strategic decisions (instead of the tactical ones already undertaken to be compliant in a shorter timeframe). Such strategic decisions would likely imply an additional implementation workload. It is thus important to appropriately balance effort between long-term strategic analyses and the time required to take decisions vs. short-term tactical and mandatory implementation.
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