The 1 August deadline is rapidly approaching for the financial services industry to respond to two papers issued by the European Securities and Markets Authority (ESMA) on MiFID II and MiFIR, the recently-enacted markets in financial instruments directive and regulations.
While high-level political agreement on the new directive and regulation were reached in January, a wealth of detail has still to be finalised. On 22 May a Discussion paper and a separate Consultation paper were issued by ESMA, calling on industry stakeholders to provide input, but with only 10 weeks in which to do so.
Taken together, the Discussion and Consultation papers amount to more than 840 pages, and there has been some criticism of the tight timescale for the industry to respond.
MiFID II and MiFIR require ESMA to develop draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) and to submit them to the Commission within 12 and 18 months, respectively, of the Directive and Regulation coming into force. ESMA’s May Discussion paper asks for views on a number of key elements of future technical standards and will be followed by a consultation paper that will include draft technical standards.
The Commission has also called upon ESMA to provide technical advice, and the May Consultation paper is part of that process.
The main subject headings for the two papers are broadly similar, though the details within each differ considerably. They both cover:
- Investor protection;
- Microstructural issues such as high-frequency trading
- Data publication and access
- Trading venue issues such as suspension of financial instruments
- Commodity derivatives
The Discussion paper also covers market data reporting and post-trading issues such as clearing.
Lawyers at Norton Rose Fulbright have produced guides to the Discussion paper and the Consultation paper.