• EU Parliament's Ferber, Gualtieri comment in March 1 letters
  • Ferber, Gualtieri say changes needed in implementing measures

European Union lawmakers impatient with the pace of work on the market-rules overhaul known as MiFID II told the bloc’s executive to speed up or risk derailing the schedule for implementation.

The European Commission last month proposed delaying the start date of MiFID II, a vast, complex law that affects nearly every financial firm operating in the 28-nation bloc, by a year to 2018 to allow firms to build necessary data-reporting systems. Now lawmakers have delivered a series of conditions the commission must meet to ensure their support.

In a March 1 letter to Jonathan Hill, the EU’s financial-services commissioner, top European Parliament lawmakers said the commission must adopt the detailed, technical measures needed for MiFID II to work “as soon as possible,” taking into account the assembly’s concerns on a number of provisions. The lawmakers, Markus Ferber and Roberto Gualtieri, also told the commission to report “regularly” on its progress.

The commission “has still not given us reassurances” that it has heeded the parliament’s concerns on the implementing measures, wrote Ferber and Gualtieri of the assembly’s Economic and Monetary Affairs Committee. They urged Hill to deliver the measures “as a matter of urgency” to provide “legal certainty.”

Bond-Market Transparency

The proposal to push back the MiFID II start date was intended to provide clarity to financial firms, from giants like Deutsche Bank AG and Goldman Sachs Group Inc. to small hedge funds, as they prepare for the retooling needed to comply with the law. But questions immediately arose as to whether a 12-month postponement would be enough, especially since the crucial implementing rules on everything from bond-market transparency to payment for investment research are still in development.

In a separate letter to Pieter de Gooijer, the Dutch envoy to the EU, whose country holds the bloc’s rotating presidency, Ferber and Gualtieri outlined “targeted amendments” that should be made, including “excluding certain securities financing transactions from the scope of the pre- and post-trade transparency regime” in the law.

They also sought clarification that the “exception to the own-account exemption” in “MiFID II does not apply to non-financial entities that hedge risks on own account and on trading platforms.”

A commission spokeswoman declined to comment on the letters.

Ferber, the assembly’s lead lawmaker on MiFID II, and Gualtieri, who heads the economic affairs committee, also told De Gooijer that the deadline for national governments to convert MiFID II into national law should be pushed back by a year to July 3, 2017. Seventeen EU finance ministries, led by Germany and the U.K., had previously insisted on this change.

The economic affairs committee plans to vote on the postponing MiFID II and a related piece of legislation, MiFIR, as early as March 16-17, the lawmakers said.