States fail to adopt MIFID

Groundbreaking legislation aimed at creating a single passport for investment firms enters into force on 1 November without the participation of all member states.

Spain and Greece have not yet written the directive into their national law. And the remaining 25 member states that have adopted the law are not necessarily well prepared for its implementation.

Delays in adopting the markets in financial services directive (MIFID) have left many firms ill-prepared for what is being touted as a new era for financial markets.

"Firms are concerned at the lack of progress," said an insider from the business lobby the City of London. "Firms based in countries which haven’t implemented MIFID are worried that they will not benefit. Firms outside these countries wonder how they will be treated."

A Commission official said that infringement procedures against Spain and Greece would be taken further if they failed to transpose the law by the end of this month. Other countries, he said, could face legal action from companies for having missed an earlier deadline of 31 January. Only the UK and Romania met the original deadline.

Charlie McCreevy, the internal market commissioner, has come in for considerable criticism from industry, which has had to absorb the costs of adapting to burdensome new rules.

But the Commission official said: "McCreevy always said it was a highly complicated, difficult process."

A cornerstone of the financial services action plan, MIFID aims to iron out differences between national regulatory regimes, harmonise investor protection rules and increase the transparency of securities transactions.

Groundbreaking legislation aimed at creating a single passport for investment firms enters into force on 1 November without the participation of all member states.