ESMA has urged national competent authorities (NCAs) not to prioritise supervisory action against execution venues and firms in respect of the deadlines of the general best execution reports under the second Markets in Financial Instruments Directive (MiFID II) in light of the COVID-19 pandemic.
In a statement, the European Securities and Markets Authority (ESMA) says that due to the disruption to business execution venues may be unable to publish regulatory technical standard (RTS) 27 reports by the 31 March deadline.
Instead, the EU markets watchdog has today confirmed it will now allow affected firms until 30 June to submit reports.
ESMA has also suggested that NCAs allow RTS 28 reports to be filed by 30 June instead of 30 April.
The Authority is further encouraging NCAs to “generally apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of RTS 27 and 28 concerning these deadlines”.
The review of MiFID II’s timetable comes shortly after ESMA applied a similar unofficial delay to the Securities Financing Transactions Regulation (SFTR) where phase one entities have been allowed to begin reporting in July instead of April.
The rapid spread of COVID-19 across the world has caught European regulators flat-footed and has forced ESMA to apply creative solutions that make full use of its limited power to offer respite without the going through the lengthy process of gaining official approval from the European Parliament.