MiFID II Deadline Delay: From ‘next to impossible’ to ‘ambitious but doable’
Notwithstanding a one-year respite in the MiFID II deadline, any financial institution that takes their foot off the gas pedal does so at its own risk, says Silvano Stagni.
The European Commission has now formally suggested a new starting date for MiFID II - 3 January 2018. This delay to the MiFID review will need a formal act of the European Parliament but we can safely assume this will happen as soon as MEPs can vote on it.
This announcement follows weeks of rumours that have allowed firms to put MiFID
on the back burner. Unfortunately the extra time comes with a stricter attitude from
the regulators. Proving that there is an implementation plan in place for the changes
necessary to achieve compliance may not be met with the same level of understanding that national regulators would have shown had the deadline been January 2017.
On top of that, institutions are faced with additional regulatory deadlines over the
next couple of years. From the Securities Financing Transactions Regulation (SFTR)
and changes to reporting to repositories under EMIR, to new asset classes being
included in EMIR centralised clearing processes, the implementation of MAD II/MAR, and the extension of BCBS 239 beyond Global Systemic Important Financial Institutions – these are just some of the new regulations that will have to be implemented in 2017.
Firms need to consider a comprehensive strategy to make the most of the time they
have. However, this is complicated by the interconnections between the MiFID
review and the other ‘acronyms’. Unfortunately the regulator tends to look at each
deadline in isolation, but investment firms should not. A comprehensive strategy to
regulatory change will save time and money. There is very little of the former and it
would not be wise to waste the latter.
Coming back to the announcement of the European Commission, a delay of 12
months just moves the task of being compliant from ‘next to impossible’ to ‘ambitious
but doable’, although the other regulatory challenges will make the next few months
quite intense and the time for waiting has now definitely passed by.
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Silvano Stagni is Head of Global Research at Hatstand.