MiFID II was billed as the biggest shake-up to European markets for a decade, but as it arrived, bankers and investors warned it will take several years before its effects are fully felt.
As banks, brokers and investors adapt to regulations that cover everything from commissions to the venues on which equities can be traded, the sheer scale of the legislation — and the multiple reprieves granted to parts of the market over certain portions — raised questions about whether regulators might have bitten off more than they could chew.
According to the European Commission, only 11 of the EU’s 28 member states have transposed the MiFID II rules into their national laws. Esma has said European investors could still use markets in those 17 countries that had failed to do so. Given MiFID II’s vast scope of more than 1.7m paragraphs, there is an understanding that there will be something of a grace period in which regulators will not clamp down as along as companies are showing efforts to comply. That said, it is unclear how long that will last.
Given MiFID II has been more than seven years in the making, it means the shake-up has eventually arrived in a very different environment to the one in which it was conceived. That raises questions about how far Mifid II will be refined in the coming years.
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