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With less than three months to go, the readiness of the EU for MiFID is looking far from convincing. According to the European Commission’s (EC) own website, only seven of the twenty-seven EU member states have notified the EC that their national regulations are ready for MiFID, a further five have indicated partial readiness, and a massive fifteen, including major trading nations such as Spain, Italy, Austria and the Netherlands have yet to introduce the directive into national law.
The Lamfalussy League Table, updated at the end of July, shows that only Belgium, Denmark, Ireland, France, Luxembourg, Romania and the United Kingdom have told the EC that they have completed the legal processes required by MiFID – although none have yet been checked by the EC. Five other nations have indicated some level of partial readiness – Bulgaria, Cyprus, Lithuania, Latvia and Slovakia – but none of these are major centres of cross-border financial activity. Of the major centres, Austria has indicated they will have completed the legal process this month, Italy by September, the Netherlands by November, whilst Spain will be even later.
Partial readiness across Europe will cause significant legal and procedural problems for the big investment firms that operate, or plan to operate, across EU national borders. It leaves little time for firms to discover whether any national-specific conditions have been introduced (“gold-plating”) and makes the post-November 1st scenario confusing at the least. Earlier this year the EC indicated that they were not prepared to delay MiFID and wrote to all member states reminding them that they could face EU disciplinary actions and also legal action by firms disadvantaged by the failure of a member state to comply in time.
However it is not just the countries that are late. It was reported in the Financial Times earlier this week that Project Turquoise, the planned equity trading platform, funded by a consortium of global banks, and designed to take advantage of MiFID changes and compete head-on with the national stock exchanges, would be at least three months late. How many other such announcements are waiting to be released during the quiet August holiday period?
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