The Markets in Financial Instruments Directive (MiFID) will be updated with a new set of regulations. The Financial Conduct Authority (FCA) will introduce this, known as MiFID II, on 3 January 2018.
Companies that deal with financial products are expected to capture, maintain and store all communications involving a transaction, or intended to involve a transaction, between buyers, sellers and intermediaries for up to 7 years.
What will MiFID II compliance look like for your business?
To ensure compliance with MiFID II you need a range of record keeping software to cover all client communications, including conference calls, video calls, internal and external, fixed and mobile. The wording in the regulations are deliberately vague to encompass all conversations using any future technology.
The FCA originally said it would require every firm to record telephone calls where the sale of financial instruments was discussed, or in which actual transactions took place. However, in April 2017 the FCA agreed smaller firms could take detailed notes from calls. There is an exemption (Article 3) for smaller firms so they can choose whether or not to record calls or take written notes.
However, we recommend these smaller businesses use call recording, regardless of this exception. Call recording brings business benefits such as more comprehensive training, better tracking of the customer experience and allows for better practice for record keeping.
The FCA has specified the minimum amount of information required in these notes:
- the date and time of the meeting,
- the location of the meeting,
- the identity of the attendees,
- the initiator of the meeting,
- relevant information about the client order including the price, volume, type of order and when it shall be transmitted or executed
It would be far easier to store this information automatically through call recording software.
5 actions you need to take to ensure compliance with MiFID II:
- Capture and store all communications at the highest quality. The right call recording software will help you connect to a range of business communications systems, meaning you can capture data more efficiently across platforms.
- Maintain recordings for up to 7 years. As well as storage solutions that are completely compliant with the MiFID II guidelines, you’ll also need to make sure you store your information securely for a set period from 6 months to 7 years, depending on your business.
- Recall and reconstruct conversations accurately and quickly. Your call recording system needs search and replay functions, along with features for call authentication and event reconstruction, to make this easier for your business.
- Offer accurate information to regulators. Once you have captured conversations, you need to ensure communications are confirmed and ready for reporting. Records need to be easily replayed or copied, but original recordings should not be altered or deleted.
- Evaluate recording processes. You need to be sure you have access to a high quality managed service that strengthens your compliance at every recording stage.
In addition to recording calls and electronic communications, MiFID II also introduces stringent guidelines for the documentation of face-to-face meetings. MiFID II does not necessitate the recording of face-to-face meetings at this time, but firms should consider the savings and benefits of a unified communications recording platform that captures meetings as part of a wider, forward-thinking compliance strategy.
Are you prepared?
The implementation of MiFID II is set to take place on 3 January 2018.
Your first step is to review all your existing business communications and compliance processes. This review can highlight the missing pieces in your existing infrastructure.
Your next step is to research the solutions you need to keep your communications compliant and explore timeframes to ensure you are ready well before the implementation of MiFID II.
A unified communications solution that incorporates call recording and compliance can future proof your business, while also increasing the efficiency of your business operations.
At Telefonix, we can guide you through bespoke solutions with dedicated support and deliver in-depth implementation and testing across a broad range of telephony and Unified Communications systems.