Last week Steven Maijoor, the chair of the European Securities Markets Authority (ESMA), countered market rumors by confirming that there would be no further delay in the implementation of MiFID II.
Speaking at the FIA International Derivatives Expo in London last week, ESMA’s Steven Maijoor addressed market concerns that the MiFID II regulation would be delayed further. Maijoor explained, “Contrary to some recent coverage and commentary, MiFID 2/MiFIR will come into effect on 3 January 2018, there will be no further delay in its implementation. One delay has been enough for all concerned.”
Acknowledging that although the timeline was tight for implementation, Maijoor felt both market participants and regulators could still meet the deadline. “The implementation and operation of MiFID 2/MIFIR are testing both regulators and market participants, but I am confident that we, at ESMA, have the capacity to meet these challenges.”
In May 2016, the European Council officially postponed the implementation of MiFID II from January 2017 to January 2018 due to “legal uncertainty and potential market disruption” that would arise from keeping to the original deadline.
Over the past year, many asset managers have been dragging their feet when it comes to deciding how they plan to meet the new research unbundling requirements of MiFID II. When asked why, some managers have said they are waiting for final rules from the FCA and AMF on MiFID II implementation. However, deep down many European buy-side managers have held out hope that MiFID II would be delayed one again.
Last week’s comments by Maijoor have effectively squashed any potential prospects that the implementation of MiFID II would be delayed a second time. Consequently, asset managers now have little reason to delay rolling out their MiFID II plans. Of course, final MiFID II rules from the FCA and AMF are expected sometime later this month or next. However, most do not expect that the final rules will be terribly different from what the FCA or AMF have outlined in previous guidance documents.
Given the tight timeframe and the recent comments by Maijoor, we expect to see a real pickup in the number of asset managers who make final decisions about how they plan to meet the new inducement provisions set out in MiFID II over the next 30 to 60 days. Unfortunately, by waiting so long to make these decisions, asset managers and the vendors they choose will find it extremely difficult to meet the January 3, 2018 MiFID II implementation deadline.