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Banks May Get Extra Time to Soften Up EU Financial-Market Rules 

November 11, 2015

Julia-Ambra Verlaine, Bloomberg Business

Financial companies pushing back against Europe’s post-crisis market rule book for the past five years may get more time to chip away at regulations they say threaten their businesses.

The European Commission said on Tuesday that there’s probably not enough time to put the rules known as MiFID II into practice by the January 2017 target, and a one-year delay may be needed to give the industry time to adapt its businesses and systems. The technical work may be accompanied by ramped-up lobbying, particularly against rules on bond-trade transparency and payment for investment research.

“The implications can cut two ways,” Richard Reid, a research fellow for finance and regulation at the University of Dundee in Scotland, said by e-mail. “On the one side, it allows more time to get things right from the outset and reduces the chances of systems breaking down. On the other hand, it can slow the momentum for reform and allows the industry more time to perhaps dilute the measures.”

The EU’s revamp of its market legislation, approved in 2014, is a centerpiece of its effort to shore up regulation following the financial crisis of 2008. The new rules would affect nearly every financial firm operating in the 28-nation bloc, from giants like Deutsche Bank AG and Goldman Sachs Group Inc. to small hedge funds. Industry groups have pushed for a delay, arguing that companies needed more time to adapt to the sweeping changes, many of which entail extensive technical refitting.

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