The European Commission has extended by one year the deadline for MiFID II due to “exceptional technical implementation challenges”.
The new deadline for the entry into application of the revised Markets in Financial Instruments Directive is 3 January 2018.
The new trading rules were initially supposed to become operational on that same date in 2017.
The deadline was extended because of the “complex technical infrastructure that needs to be set up for the MiFID II package to work effectively”, according to the Commission.
The Commission said the European Securities and Markets Authority (ESMA) informed it that national authorities and trading venues responsible for putting the infrastructure in place were not in a position to do so by the initial deadline.
“In light of these exceptional circumstances and to avoid legal uncertainty and potential market disruption, an extension was deemed necessary,” it said.
The extension comes after the Commission had in August ruled out notions of delay.
The new deadline does not affect the timeline for the adoption of the so-called level II implementing measures under the directive and the corresponding regulation (MiFIR), however.
MiFID II does not directly apply to European institutional investors, but they should take an interest, IPE contributing editor Joseph Mariathasan has argued.
Indeed, in the UK, the new rules are a pressing matter for local authority funds, as they could face a “fire sale” of up to half their £230bn (€314bn) in assets if they are reclassified as retail investors under the directive.