IMF warns against Mifid delays

Delays could threaten Lamfalussy process

In a recent report, the International Monetary Fund (IMF) warned EU member states to take action in implementing cross-border investment rules, specifically the Markets in Financial Instruments Directive (Mifid) if they want to take advantage of the benefits of an integrated competitive financial market in Europe. The consequences of further delay would affect member states’ ability to share fully in the perceived benefits of a more transparent and open European financial market, but moreover it will actually damage their own markets due to the legal uncertainty for market participants.

Further delays may also damage the Lamfalussy process, according to the IMF report, which has so far been applauded by member states as the most effective way of bringing European regulation to fruition. The process is due for review in October this year, and a failure to implement Mifid on time could raise questions about its effectiveness.

Eight member states have transposed Mifid so far – UK, Romania, Ireland, Belgium, Germany, Denmark, France and Luxembourg – but others are lagging behind and may miss the November deadline. The European Commission expects Greece and Spain to miss the deadline.