The long road ahead

Anne PlestedWith the arrival of the new year we have updated the MiFID II Roadmap to reflect the latest anticipated timeline for the regulatory changes.

The top row of the Roadmap depicts the progress of MiFID II from Public Consultation last December, via draft legislation issued in October 2011, to likely agreement on legislation expected by late 2012. It is proposed that ESMA will develop the detail (Level 2) rules in a number of binding technical standards into 2013 with MiFID II implementation now expected to be in 2014 – at the earliest!

The lower section of the Roadmap highlights some of the other major changes in the EU regulatory space, running in parallel with MiFID II.

The review of the Market Abuse Directive (MAD) which, like MiFID II, takes the form of a directive and a regulation, was issued as draft legislation on the same day as MiFID II (20th October 2011) and will be debated by the European Parliament (EP) alongside MiFID II in 2012.

EMIR (European Market Infrastructure Regulation) reforms for OTC derivatives, which have been debated in the EP since September 2010, are now likely to suffer further delays to the agreement on the final text which was due by Christmas but has now moved out to February 2012 at the earliest.

Along with extensions out to Q2/Q3 2012 for completion of the Dodd-Frank Act rule-making on OTC derivatives in the US, what this will mean in respect of the commitment made by G-20 leaders that “all standardised OTC derivatives contracts should be traded on exchanges or electronic platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest…” remains to be seen.

2012 (the year of the dragon, incidentally) will be a year of consultation but, in the meantime, we need to be careful of guidelines and reports issued by ESMA under the current MiFID framework which could impact our customers and our products.

4 Responses to “The long road ahead”
  1. steve grob says:

    Good job Anne in putting all this together. What do you think will be the most contentious issues as these regs pass into law?

  2. Anne says:

    Thanks Steve. I think the sweeping reforms due to hit the derivatives markets are Top of the Chart this month! The European Parliament is busy wrestling with Brussels lobbyists and trade associations in a push to agree the final details of EMIR (having missed their Christmas deadline) and it all needs to line up with whatever rules come out of the US!

  3. Christian Voigt says:

    Just a quick update on the EMIR timeline. ESMA will have until the end of September to finalise the technical standards for EMIR. ESMA had originally been given until 30 June to finalise its standards.

  4. Anne says:

    Thanks Christian – yes the EMIR text on reforms for OTC derivatives, due by Christmas and moved out to February, was finally agreed last week on 9th.

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