The investment management industry has called on Brussels to delay and change the updated Markets in Financial Instruments Directive (MiFID II), which is due to be implemented just over a year from now.
The European Fund and Asset Management Association (Efama), which represents national industry bodies, wants a delay partly over fears the directive will be implemented unevenly between countries.
MiFID II is due to come into force on January 1, 2017, and has wide implications for assets managers, ranging from how payments of rebates to fund distributors are made, to how securities research is paid for.
Efama says the amount of technical information that has to be absorbed by the industry alone means the start date should be postponed.
But on a deeper point, William Nott, vice-president of Efama and chief executive officer of M&G Securities, warned MiFID II could lead to differences of interpretation between countries regarding the rules.
Nott suggests MiFID II would work better as a regulation rather than a directive.
A directive could be “gold plated” by national legislators or adapted to fit the needs of a particular state and this could lead to an uneven playing field, or “fragmentation”, across Europe’s industry, says Nott.
However, according to European law, regulations have "general application", which means they are binding on individuals and effectively form part of domestic law as soon as they are made. It may be necessary to amend existing national provisions that are inconsistent with regulations, rather than make new legislation altogether.
Efama says it is continuing to discuss details of MiFID II with the European Commission.
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