McCreevy Puts Rocket Under Member States Over MiFID Implementation

by Ulrika Lomas, for LawAndTax-News.com, Brussels

26 April 2007

European Internal Market and Services Commissioner, Charlie McCreevy on Tuesday urged those Member States that have not yet implemented the Markets in Financial Instruments Directive (MiFID) to put this issue at the top of their political agenda.

In letters to the Ministers of Finance concerned, the Commissioner expressed deep concern about delays in implementation into national law, for which the deadline elapsed on 31 January 2007.

To date only the United Kingdom, Ireland and Romania have notified the Commission of full implementation of MiFID.

Commissioner McCreevy stated that:

"I urge Member States to keep to the timetable that they themselves have agreed. Further delays could well expose Europe's firms and banks to serious competitive disadvantage."

As agreed by the Council and European Parliament, market participants should have an additional nine months – i.e. from 31 January 2007, the deadline for Member States to implement MiFID in national law, until 1 November 2007 – to prepare their systems and organisation in line with MiFID requirements.

Further delays in implementation of national legislation will give firms less time to prepare for a completely new regulatory environment.

Furthermore, a lack of national implementing legislation beyond 1 November 2007 could endanger the proper functioning of the MiFID 'passport' and have a significant impact on EU financial markets, as investment firms could have difficulties providing services in other Member States, and could be uncertain as to which legal regime is applicable.

In such a situation, there is a risk that Member States could face legal action by private parties who might claim damages for losses incurred because of late implementation of national legislation.

The Commission has launched infringement procedures against those Member States that have not yet transposed the relevant Directives, namely Directive 2004/39/EC on markets in financial instruments (MiFID) and Directive 2006/73/EC (to implement MiFID).

MiFID is one of the cornerstones of the Financial Services Action Plan (FSAP) and will play a vital role in creating a robust, common regulatory framework for Europe's securities markets.

MiFID will remove obstacles to firms' use of the EU-wide investment 'passport', foster competition and a level playing field between Europe's trading venues, and ensure a high level of protection for investors across Europe.

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