By Gary Stone, Chief Strategy
Officer for Bloomberg Trading Solutions
With 14 months until the current January
2017 MiFID II implementation deadline looming, the market began
to breathe easier when a tweet, followed by speeches by
officials, indicated that the European Commission is pushing
for a blanket one-year extension to that deadline.
tempered the following day when members of the European
Parliament indicated that a delay isn’t a done
deal. The discussion around the implementation date is going to
be a fluid situation. However, it is important that any delay
does not impact the delivery of the overriding policy
objectives to further increase market transparency and promote
competition in EU markets.
At Bloomberg we fully support these objectives and remain
committed to achieving our MiFID II solutions by January 3,
2017. Our perspective, which is informed by our active and
constructive engagement with the market on Mifid II, is that an
implementation delay needs to focus on extending "crunch time"
– the time between final National Competent
Authorities (NCA) guidance and the final implementation
A sensible delay after national
Currently, July 17, 2016, is the date that
the NCAs are required to provide their directive guidance.
Thus, it is only on July 18, 2016 that we will know what needs
to be done and can finish designing, building and testing
July 18 to January 3,
2017 — that is the "crunch" period where relief is
needed. An extension of this period will provide vendors and
investment companies the necessary time to design, build and
adequately test solutions prior to implementation
A simple one-year push that equally pushes out the deadlines
for the NCA guidance — and simply moves the "crunch"
period of July 2016-January 2017 to July 2017-January 2018 will
not help the market.
A phased-in grace period
If an extension cannot be agreed on, then another potential
solution to the "crunch" period could be a
phased-implementation approach, similar to the implementation
of the short-selling regulations a couple of years back and
with the Alternative Investment Fund Managers Directive
(AIFMD).The deadline could remain at January 3, 2017, with Esma
and the NCAs’ layering conformance with a softer
The US has a "No Action" legal structure, but no such vehicle
exists in Europe. However, Esma and the NCAs could take the
posture during a set period that everyone is mandated to be
"live testing" what they have, but no one gets fined because
the regulator focus is on working with the market to get it
There would be tolerance for technology that may go on and off
line during this period. For example, systems miscues might be
present in pre-trade and post-trade transparency, as systems
get synched up, and any discovery that not everything is being
transaction-reported would have a grace period. Of course, that
period would need to have an end date when full conformance
would be expected.
In our opinion, industry and regulators working together to
get the implementation right and to achieve the goals and
principles of the regulation is a prudent approach.