The European Commission has rejected certain parts of the European Securities and Markets Authority’s (ESMA) proposal for Regulatory Technical Standards ESMA had submitted in its final report to the European Commission on 28 September 2015 (2015-ESMA-1464).
This emerged today from information from the Commission passed to the European Parliament, according to a statement published by Markus Ferber, Member of European Parliament (MEP). Therefore the European Commission informed the European Parliament’s MiFID II negotiating team that the draft regulatory technical standards on non-equity transparency, on the ancillary activity exemption and on position limits were sent back to ESMA to revise those standards taking into account the European Parliament’s position more thoroughly. Markus Ferber, who is the European Parliament’s Rapporteur for MiFID II, explained:
“I am glad to see that the European Commission takes the concerns of the European Parliament seriously. The latest drafts were far from being acceptable for the European Parliament. Especially the position limits regime urgently needs a comprehensive redrafting in order to effectively curb food speculation. So far, neither ESMA or the Commission have managed to deliver. The latest drafts were just not up to standard and would not have solved the problem at all. The Commission is right to be afraid of the technical standards being rejected by the European Parliament – hence, further work is necessary. I expect ESMA to revisit those technical standards swiftly, thoroughly and to adapt them in line with the European Parliaments remarks. However, the redrafting must not lead to further delaying the overall MiFID II timeline. The European Parliament’s concerns on this topic were known and available for quite some time. Therefore, Commission and ESMA could have easily acted earlier.”
The responsible European Commissioner, Jonathan Hill, has asked ESMA to reconsider the three sets of rules. The Commissioner’s spokeswoman said in a statement that “given that parts of the new framework implies a rather substantial change compared to the current regime, we have asked ESMA to do some fine-tuning in three specific areas in order to have a more cautious approach in the early phases of the MiFID II-roll out”. According to the statement, the Commission will only endorse the three standards under question provided that certain changes are made.
ESMA has confirmed it had received the the letter from the Commission and was deciding on the way forward.