EU lawmakers back one-year delay to 2018 for MiFID securities law

By Huw Jones LONDON (Reuters) - A group of senior European Parliament lawmakers have said they are ready to back a one-year delay to January 2018 for the introduction of a landmark reform of European Union securities markets. The bloc's executive European Commission has said a delay is needed as regulators and the industry will not be ready in time for the original January 2017 start date for the Markets in Financial Instruments Directive, or MiFID II. The rules update the bloc's securities laws to take into account lessons learned from the 2007-09 financial crisis and rapid advances in trading technology. MiFID II will significantly increase reporting requirements for banks and brokers but final rules have yet to be published, meaning time is too short to get IT systems ready. "The European Parliament's negotiation team has informed the European Commission that we are ready to accept a one-year delay of the entry into force of MiFID II," German centre-right lawmaker Markus Ferber said in a statement on Friday. The commission will have to formally propose a draft law to delay the start date for MiFID and approval from parliament and member states will be needed. A diplomat for one of the large EU member states said that so far no states have formally spoken against a delay. Ferber said parliament's backing was on condition that the commission "swiftly" completes the measures still needed to implement MiFID and "thereby takes into account the European Parliament's priorities". Several lawmakers want the EU executive to make changes to key draft implementing measures the bloc's securities watchdog ESMA has written. "We are very disappointed that our concerns in three specific areas have not been addressed by ESMA in a satisfactory manner, namely in the areas of position limits, non-equity transparency and the ancillary activity exemption," a letter from Ferber and other lawmakers to the commission seen by Reuters said. In the letter, the lawmakers say the draft rules on curbing large positions in commodities are not strict enough to "address excessive commodity price volatility". Curbs on liquid commodity contracts should be lower than proposed by ESMA, the letter says. Lawmakers also want changes to how regulators define bonds as being "liquid" and thus subject to greater transparency. They also think that rule exemptions for ancillary activity - a reference to companies like energy giants who have commodity trading arms - are too generous. (Reporting by Huw Jones, editing by Carolyn Cohn and Jason Neely)