European Commission gives an update on Mifid at e-symposium

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Only three countries – UK, Ireland and Romania – have fully transposed Mifid into national law, but some states are not far behind. Laurence White, internal market and services directorate-general, European Commission, stated during the OpRisk & Compliance Mifid e-symposium that Belgium and Lithuania had notified the Commission that they will be ready by April, while Germany, Sweden and France would be ready by May.

For firms located in those countries that will not transpose Mifid into national law by summer or even autumn, will struggle to implement their Mifid programmes without any firm rules in place. “We are not happy with the current situation, but we are encouraged that all but Spain will be ready to transpose Mifid by the November deadline,” said White.

The Commission launched infringement proceedings against 24 states on April 20, and on a more personal level, Commissioner Charlie McCreevy sent letters to the individual national finance ministers to urge them to push Mifid to the top of their respective regulatory agendas.

The Commission is publishing the Lamfalussy league tables in an attempt to name and shame those countries that are lagging behind with Mifid, and White urges businesses to lobby their governments to push Mifid forward.

The Commission is keen to get Mifid implemented on time, as it is the cornerstone of its Financial Services Action Plan (FSAP). Moreover, as White affirmed, it is dedicated to maintaining the harmonisation of the Directive by keeping a hard line on Article 4.

Article 4 of the Mifid Level 2 Directive allows national regulators to add other measures that go beyond what the Directive requires, but only in very limited circumstances. The UK has requested that it wishes to retain its guidelines proposed in CP06/19 concerning the retention of the FSA’s requirements on: the apportionment of responsibilities, the content of confirmations and periodic statements, certain requirements relating to the market for packaged products, and the use of dealing commissions.

According to White, so far five states (including the UK) have indicated they will be using Article 4, three were not sure, five did not respond to the Commission’s request, and 14 confirmed they would not be using it at all. White also confirmed the Commission’s intention to keep the Directive as pure as possible to ensure maximum harmonisation and to reduce gold-plating. “We will be rigorously examining all Article 4 notifications, and will be meeting with UK [representatives] soon to grill them on the necessity of its request,” said White. Commissioner McCreevy has also been outspoken about his desire to keep Article 4 requests to an absolute minimum, and there is the impression that the Commission will be not be a pushover on this issue.