Following a change introduced last week, the European Commission will now be able to flag any legal concerns relating to documents drafted by the European Securities and Markets Authority (ESMA) before their final adoption by its board of supervisors, rather than after.
As a result of this, the deadline for the submission of the final draft technical standards for the Markets in Financial Instruments Directive II has been pushed back to September 2015 from July.
Despite this, a letter written last week by ESMA chair Steven Maijoor said the changes will not stop MiFID II from being implemented on 3 January 2017, as they will by-pass the “lengthy re-approval process” of a later review.
Maijoor’s letter added that the early legal review will not affect the independence of the decision-making process at the European Commission and at ESMA.
“ESMA’s board of supervisors will remain fully independent when adopting the draft technical standards, as provided for in the ESMA Regulation and respective sectorial legislation,” he said.
“I would like to stress that the early legal review does not affect in any way the powers entrusted to the European Parliament and the Council towards delegated acts under the Treaty.”
Commenting on the delay, Michael McKee, partner at global law firm DLA Piper said the approach makes practical sense because it will speed up the process of ensuring that regulatory technical standards meet EU law drafting requirements.
“Squeeze”
However, he added that it will “squeeze” the time the industry has to adapt to MiFID II before it is implemented, should it still meet its original deadline.
“This will have a direct consequence on the financial services industry as they will not get to see the drafts for a few months,” he said. “There are lot of very technical processes that will take time to implement in order to comply with MiFID II, for example, IT processes.
“This delay will definitely have a knock-on effect.”
Headquartered in Paris, ESMA is a European Union financial regulatory institution and European Supervisory Authority.
It is currently in the process of turning MiFID II – which aims to increase financial transparency across Europe in the wake of the 2008 financial crisis – into legislation.
