Posted by Christian Voigt on Thursday, May 14, 2015
The European Commission (EC) and ESMA have agreed on an improved process to draft the Level 2 texts for MiFID II. On the back of those discussions, ESMA asked for a 3-month extension on their own deadline to submit draft technical standards and the EC granted it. While the next Level 2 drafts will now not be published until September 2015, the benefit is that further changes are less likely. It is certainly better for everyone that ESMA and the EC avoid a game of legal ping pong.
However, ESMA's statement that this will not delay the implementation time seems to me rather bold. The initial implementation plan has been viewed by participants as ambitious from the outset; having to wait an additional three months before we see any further detail is not helpful.
Looking back at the EMIR implementation, this pattern looks somewhat familiar. The combination of no EU no-action letter, delayed Level 2 negotiations and a go-live date set in stone in Level 1, will doubtless result in increased implementation pressure.
Posted by Steve Grob on Thursday, May 14, 2015
This morning I read with interest a colleague's blog post on the delay to the publication of the ESMA technical standards from July back to September. Whilst I appreciate that these things are complicated, it seems hard to understand how this won't delay the implementation date without potentially increasing the very risks the regulations are trying to prevent. Building software and systems properly isn't just a question of resource; it's just as much about process.
Here at Fidessa Towers, for example, we work on a quarterly release cycle. Next quarter's code is being loaded onto the waggons to be shipped, the release 6 months away is being tested, the following release is being programmed and the release a year out is being designed. Only by taking a disciplined approach like this can we manage to produce high quality software that meets its functional objectives and get it properly deployed for customers. For major banks trying to implement this software, the problem is even worse as they face far greater conflicting priorities against the same moving global regulatory feast.
I fear, therefore, that the venerable Dr Voigt is right and that our industry is being served an unpalatable appetizer of unintended consequences before we have even taken our seats at the table.