Following the European Commission’s proposals, which were in response to a request by the European Securities and Markets Authority (ESMA) to push back the implementation of the directive by 12 months, global asset managers have said they would welcome the extension.
Expecting the publication of detailed rules this summer, giving ample time to ready their businesses ahead of the 3 January 2017 deadline, key areas still lacking clarity has put undue pressure on the asset managers, advisers and distributors trying to finalise their propositions.
Consistency
Sheila Nicoll, head of public policy at Schroders, said: “A delay would be welcome to make sure we have an effective transition to the new rules and ensure as much consistency as possible around the EU.”
One area where significant uncertainties existed was whether investment research could be paid for alongside trades andtherefore whether asset managers’ and brokers’ business models required an overhaul.
“Similarly, rules around the offering of complex products to retail investors, the circumstances in which non-independent advisers may receive payments, or ‘inducements’ from providers and obligations on providers to ensure their products reach their ‘target market’ still need to be worked through.
“The regulators are themselves concerned that the IT systems required for them to receive reports from the market participants will not be ready in time,” Nicoll added.
Necessary delay
Head of public policy at Fidelity International, Philip Warland, agreed a delay was probably necessary.
He said: “For much of the agenda the timelines are tight but not impossible, but there are some such as the final detail on fixed income liquidity and transaction reporting which may be impossible on current plans.
“A year’s delay should be sufficient, not least for the regulators to put in place some of the systems they need. I would guess most firms would maintain their current programmes even if there is a delay, and only use the flex on the difficult parts.”
EY executive director Uner Nabi, who is responsible for MIFID II in wealth and asset management across EMEA, said he was only surprised the delay was being put forward on the directive in its entirety.
