lots being written on MiFID this week as it’s MiFID implementation week
– hurrah! – so I thought I’d try to summarise some of the key things
being reported during the week. Today, I thought it worth a very brief
recap of the key MiFID milestones
February 1992: Maastricht Treaty signed by European Union’s Member States to create a Economic and Monetary Union (EMU)
May 1993: The
Investment Services Directive (ISD) introduced, with the concentration
rules for focusing trading through national exchanges which proves to
be unsuccessful (hence the reason for MiFID).
January 1999: Austria,
Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain adopt the Euro as a trading currency.
March 2000: The
Lisbon meeting of the European Council creates the Financial Services
Action Plan (FSAP) to create a Single European Financial Market for
banking and insurance which leads to some of the reasoning behind MiFID.
The Lamfalussy Process named after Alexandre Lamfalussy, the chair
advisory committee that created it, is created to ensure better
regulation processes within the European Union for developing financial
services directives. MiFID is the first Directive to really test this process – it is not the first directive to use the process however, as the Prospectus Directive, the Market Abuse Directive and the Transparency
Directive have also been through Lamfalussy structures.
April 2004: MiFID
adopted by the European Parliament and Council (Lamfalussy Level 1),
beginning a two year consultation process with original implementation
date intended for April 2006. As we now know, this was pushed back to
May 2005: Introduction of the MiFID
Joint Working Group in London, UK, joining SIIA’s FISD, the Reference
Data User Group, the FIX Protocol Ltd and ISITC Europe, in a
collaboration to influence the wordings of MiFID and reduce the impact
upon technology structures.
Introduction of MiFID-Connect, a collaboration of many groups including
the Association of British Insurers (ABI), the Association of Private
Client Investment Managers and Stockbrokers (APCIMS), the Association
of Foreign Banks (AFB), the Bond Market Association, the British
Bankers’ Association (BBA), Building Societies Association (BSA), the
Futures and Options Association (FOA), the International Capital Market
Association (ICMA), Investment Management Association (IMA), the
International Swaps and Derivatives Association (ISDA) and the London
Investment Banking Association (LIBA), to reduce the legal risks and to
simplify the implementation of MiFID.
September 2006: After
extensive consultations and changes to wordings, MiFID is adopted and
ratified by the European Parliament (Lamfalussy Level 2) and now needs
to be transposed into national implementation.
31st January 2007:
Deadline for countries to transpose MiFID into national laws
(Lamfalussy Level 3). Only the UK achieves this on time. Although
many people say Romania and Ireland were also on time, they followed
the UK in February and March respectively.
1st November 2007: Deadline for countries to implement MiFID as national law (Lamfalussy Level 4). According to the European Commission’s September survey of member states, all countries will achieve this except
for Spain and Poland who are yet to advise when Level 3 will be
implemented. The Czech Republic, Estonia, Finland, Hungary and the
Netherlands are the last countries to achieve Level 3 in November 2007.
As many of you know, I pulled together a book on Europe after MiFID
a few months ago, with contributions from most of the leading figures
in the industry. If you want to know more about MiFID’s background and
implications then feel free to have a look at it as it gives you over
20 views of what MiFID means other than my own.
see the Financial Times is writing extensively about MiFID this week
and thought the leader column from Jennifer Hughes yesterday entitled “Financial Services brace for confusion” was spot on. As you’ll see from the link, it’s for FT subscribers only, but here’s a few choice lines:
UK financial services industry is braced for months of uncertainty and
confusion as … MiFID is due to become law throughout Europe on
Thursday, but in spite of years of planning, many countries and
companies are still far from fully implementing it. This has left both
business and regulators unsure about the scale of problems that could
be thrown up by the directive.”