ESMA Comments on MiFID II Implementation and Brexit


On September 29, 2017, reported on comments by Stephen Maijoor, ESMA Chair, on the implementation of MiFID II and Brexit.

Mr. Maijoor believes that while implementation of the new rules under the MiFID II Directive (2014/65/EU) and Markets in Financial Instruments Regulation (Regulation 600/2014) may trigger some glitches, broader disruption is not anticipated. also reports that the FCA has said that it would not punish firms for “not meeting all requirements straight away where there is evidence they have taken sufficient steps to meet the new obligations by the start date”. Mr. Maijoor further commented that it is likely that regulators would look differently on a violation on January 4, 2018, from one at a later date.

Regarding Brexit, Mr. Maijoor observed that MiFID II had been designed on the basis that the most liquid European market would indeed be within the EU. Depending on how Brexit negotiations progress, he believes that the exit of the UK from the single market would affect some elements of MiFID.

According to Mr. Maijoor, ESMA has begun assessing the impact of a possible “hard” Brexit on the stability of the EU’s securities market. This includes considering the position of credit rating agencies (CRAs) and trade repositories (both of which ESMA directly regulates), and protection for EU investors in UK-based mutual funds.