As of January 2018, the Markets in Financial Instruments Directive (MiFID II) Regulations have been put into place by the EU in response to the 2008 financial crisis. This means significant changes to many areas relating to the conduct of business, including the regulations regarding the storing and recording of conversations.
Now any organisation providing financial services to clients linked to ‘financial instruments’, including those providing advice, will have to record and store all communications intended to lead to a transaction.
What's new? Key change overview
The retention period for call recording data has stretched from 6 months to a minimum of 5 years.
Calls must be recorded for anyone in the "advice chain" that could lead to a trade.
Data must be proven to be quickly & easily retrievable for specific transactions or within a given time period.
What means of communication must be recorded?
How do these communications need to be stored?
Recordings must be stored for a minimum of five years from the date the record is created (and if requested by the competent authority for up to seven years). All records must be kept in a 'durable medium' so that they can be effectively monitored for compliance, and in a way that allows them to be replayed or copied, ensuring the original record cannot be deleted or altered. All of this data must be easily accessible and available upon the FCA's request.
How do recordings need to be monitored?
To ensure compliance, your organisation will need to review all records on a period basis. The monitoring is specified as ‘risk-based and proportionate.’ So you will need to prove that the appropriate policies, procedures and management of your recordings are in place and that your management have clear supervision of these policies. Recording procedures must then be periodically re-evaluated with alternative or additional measures adopted if necessary. If you are not able to comply, an investigation into why the records are not able to be retained will need to take place. Alongside the recorded data, records of these investigations must also be kept for a minimum of five years.
Not sure where to start?
For more information on MiFID II you can download our free fact sheet below.
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