Malta late on market directive

European Internal Market Commissioner Charlie McCreevy has sent a letter to the Maltese authorities urging them to implement without further delay the new Markets and Financial Instruments Directive (MiFID).

The European Commission yesterday revealed that Malta, together with another 23 member states, is already facing an infringement procedure over the issue as member states had until the end of last January to transpose the new rules.

The MiFID is one of the cornerstones of the Financial Services Action Plan of the EU and will play a vital role in creating a robust, common regulatory framework for Europe's securities markets. It will remove obstacles to firms' use of the EU-wide investment 'passport', foster competition and a level playing field between Europe's trading venues and ensure a high level of protection for investors across Europe.

So far, only the UK, Ireland and Romania have notified the Commission of full implementation of the rules.

"I urge member states to keep to the timetable they themselves have agreed to. Further delays could well expose Europe's firms and banks to serious competitive disadvantages," Mr McCreevy wrote in his letter to the finance ministers of the countries in question.

Despite this warning, it seems Malta will take some time before transposing the new directive.

Correspondence between Brussels and Malta published yesterday by the Commission shows that the Maltese Financial Services Authority (MFSA) is indicating June as the month when the transposition of Directive 2004/39 EC will occur.

According to Malta, a draft Bill has already been "consulted on" and further secondary legislation is being finalised. The Maltese authorities said that "the final draft of the MFSA rules which implements parts of the MiFID framework directive and the MiFID implementing directive was published on January 31, 2007. It is planned that the rules will be adopted immediately after the adoption of the primary legislation, that is June 2007".

Originally, member states had agreed that market participants should have an additional nine months - from January 31, 2007, the deadline for member states to implement MiFID into national law, until November 1, 2007 - to prepare their systems and organisation in line with the new requirements.

The Commission warned that further delays in the implementation of national legislation will give companies less time to prepare for a completely new regulatory environment.