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The European Commission (EC) is poised to refer Spain, Poland and the Czech Republic to the European Court of Justice (ECJ) for failing to implement the Markets in Financial Instruments Directive (MiFID).

According to an ECJ spokesperson, the EC is dealing with “lots of infringements” which will be passed over to the courts to consider unless the offending countries “act swiftly.”

The MiFID directive came into force on 1 November last year, but the three offending EU countries failed to implement the rules into national law by 1 January deadline.

The directive applies to all EU 27 member states, and requires financial services firms to reassess and re-document huge chunks of their business, causing massive upheaval at a huge cost. MiFID has replaced the Investment Services Directive and aims to create a level playing field in financial services across European member states whilst focusing on three main objectives.

1) Passporting - the authorisation of a financial services firm to provide its services in any other EU country using its own business conduct guidelines, provided that it doesn’t establish an overseas branch.

2) The standardisation across member states of rules on internal systems and controls, and on conflicts of interest

3) Increased transparency - member states must allow free access to their national securities exchanges, while firms must also publish a wider range of securities trading information, including pre- and post-trade pricing information.

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