The Markets in Financial Instruments Directive recast under the new directive (MiFID II) and related regulations (MiFIR) are currently scheduled to take effect in January 2017, and hedge fund managers trading in Europe will need to be prepared for the accompanying significant changes to the environment.  See “FCA Urges Hedge Fund Managers to Prepare for MiFID II,” Hedge Fund Law Report, Vol. 8, No. 42 (Oct. 29, 2015).  However, the European Securities and Markets Authority (ESMA) recently concluded that a number of “technically complex elements envisaged in MiFID will not be operational by the time that MiFID II will become applicable.”  Citing the need for a full overhaul (by industry supervisors as well as ESMA) of systems under MiFID I and the fact that the technical rules that shape those systems will only become effective a few months prior to January 2017, ESMA has offered several proposals for delaying the effective date for MiFID II and MiFIR.  This article discusses ESMA’s rationale for the delay and its proposals, as well as the European Parliament’s MiFID II negotiating team’s response.  For more on MiFID II and MiFIR, see “MiFID II Expands MiFID I and Imposes Reporting Requirements on Asset Managers, Including Non-E.U. Asset Managers,” Hedge Fund Law Report, Vol. 8, No. 21 (May 28, 2015); and our two-part coverage of Simmons & Simmons and Advise Technologies’ Comprehensive Overview of MiFID II: Part One, Vol. 8, No. 24 (Jun. 18, 2015); and Part Two, Vol. 8, No. 25 (Jun. 25, 2015).