Spain Plays Catch-Up on MiFID Markets Law as EU Sues Over Delay

(Bloomberg) -- The Spanish government is racing to put the MiFID II financial-markets rules on its books -- more than a year after the deadline -- after it was sued by the European Union.

Spain’s failure to convert the revised Markets in Financial Instruments Directive into national law could interfere with firms providing investment services across national borders in the EU, according to the European Commission, the bloc’s executive arm. The MiFID II rules, which affect markets in everything from equities trading to investment research, kicked in on Jan. 3.

The government in Madrid is using two instruments to turn MiFID II into Spanish law: a bill that’s working its way through parliament, and a second piece of legislation that it plans to present “as soon as possible,” a spokeswoman for the Economy Ministry said in an emailed reply to questions. The deadline for completing the process was July 3, 2017.

The European Commission has sued Spain and Slovenia in the EU Court of Justice, saying their failure to fully convert MiFID II into national law “disrupts the single market.” The MiFID II package consists of two main parts. The Markets in Financial Instruments Regulation, or MiFIR, is binding in its entirety and applies directly in all EU countries. The revised directive, MiFID, must be put into national law before it takes effect, a process known as transposition.

The European Securities and Markets Authority moved to limit the fallout from late transposition, especially on firms’ right -- known as a “passport” -- to trade across borders in the EU. ESMA said late last year that authorizations granted under the previous version of MiFID would remain valid after Jan. 3.

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Patrick Henry, Ben Sills

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