Pity the poor souls
What’s on your summer reading list this year? A John Grisham thriller perhaps; one of Jane Austen’s classics, a Steinbeck novella, or even all three?
Whatever your ideal choice, it’s highly unlikely you’ll manage to start your personal list given that the sizeable consultation and discussion papers for the implementation of the revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) have now been released. With a deadline of 1st August 2014 for feedback there are a select, unlucky few who will have to scrutinise the 844 pages of text, posing 860 questions and containing 100 requirements for the European Securities and Markets Authority (ESMA) to draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS).
To put this task into context, the documentation is about double that which was distributed for the European Market Infrastructure Regulation (EMIR) consultation process, but will have to be processed in the same amount of time. Unlike EMIR which focused primarily on OTC derivatives, MiFID II will additionally impact high-frequency trading, exchange traded funds and data publication and access. Those charged with the task of responding fall into three key stakeholder groups; market participants, the industry authorities (such as the FCA in the UK) and finally the general public, who are doubtless dying to read such a lengthy treatise.
For the Regulatory and Compliance Officers of financial institutions, reading and understanding a 311 page consultation paper supported by a 533 page discussion paper is a tall order, but could be completed before 1st August. What will really scupper their summer holiday plans is the need to analyse each question, then conduct a detailed impact analysis on the firm’s operations before carefully drafting a response to ESMA in order to mitigate any negative effects of the directives and regulation. The danger therefore is that market participants are either daunted by the task they have been set, or may simply miss the response deadline, meaning that their feedback is not heard and thereby increasing the chances that ESMA will continue along their default course of action.
The figures speak for themselves with only 44 working days remaining, the 860 questions across 844 pages actually equates to analysing roughly 19 pages and answering as many questions, each and every day. So if you’re on a leisurely stroll through the City this summer, spare a thought the haggard souls appearing from Bank station with bags under their eyes and a briefcase bursting with regulatory guidelines, on their way to the office for another 14 hour stint.
It probably isn’t worth mentioning to them either that this discussion paper will resurface as a further consultation paper on draft technical standards by late 2014, just in time for Christmas!.
If you haven’t downloaded your summer reading yet, you can find it here.
This blog has appeared on Finextra. Click here to see the entry on the Finextra website