Time is running out fast for FCA regulatated businesses to become MiFID II compliant. If you are looking for a brief overview of what it is, whether it applies to you, and what you need to do if it does, then look no further.
The Markets in Financial Instruments Directive or MiFID II has been a FCA requirement in the UK since 2011, but only for the financial sub-sector of equity and bond trading.
In 2016 the FCA extend the directive to the wider financial industry, with the goal of 'strengthening' the field by providing further transparency to the markets.
The FCA is imposing the recording and long-term storage of both fixed line and mobile calls for traders. Additonally the EU General Data Protection Regulation which applies to businesses and runs concurrently to MiFID II, concentrates more on the recording of conversations and data privacy.
Information of both MiFID II and EUGDAR can be found in the links below.
Alternatively, Bloomberg have created a very helpful, short animated video to explain MiFID II. Simply click below to watch.
With over 150 pages the MiFID II regulation can be a big read, escpecially when only a small amount may be applicable to your business. We have taken out the article that covers the recording and storage of conversations between firms and their customers, for your convenience.
Article 16(7) – Directive 2014/65/EU
"Records shall include the recording of telephone conversations or electronic communications relating to, at least, transactions concluded when dealing on own account and the provision of client order services that relate to the reception, transmission and execution of client orders.
Such telephone conversations and electronic communications shall also include those that are intended to result in transactions concluded when dealing on own account or in the provision of client order services that relate to the reception, transmission and execution of client orders, even if those conversations or communications do not result in the conclusion of such transactions or in the provision of client order services.
For those purposes, an investment firm shall take all reasonable steps to record relevant telephone conversations and electronic communications, made with, sent from or received by equipment provided by the investment firm to an employee or contractor or the use of which by an employee or contractor has been accepted or permitted by the investment firm.
An investment firm shall notify new and existing clients that telephone communications or conversations between the investment firm and its clients that result or may result in transactions will be recorded.
Such a notification may be made once, before the provision of investment services to new and existing clients.
An investment firm shall not provide, by telephone, investment services and activities to clients who have not been notified in advance about the recording of their telephone communications or conversations, where such investment services and activities relate to the reception, transmission and execution of client orders.
Orders may be placed by clients through other channels, however such communications must be made in a durable medium such as mails, faxes, emails or documentation of client orders made at meetings. In particular, the content of relevant face-to-face conversations with a client may be recorded by using written minutes or notes. Such orders shall be considered equivalent to orders received by telephone.
An investment firm shall take all reasonable steps to prevent an employee or contractor from making, sending or receiving relevant telephone conversations and electronic communications on privately-owned equipment which the investment firm is unable to record or copy.
The records kept in accordance with this paragraph shall be provided to the client involved upon request and shall be kept for a period of five years and, where requested by the competent authority, for a period of up to seven years."
Directive in full:
What we do
In the wake of MiFID II annoucement, Vostron created a bespoke, call recording service for FCA regulated firms, enabling them to comply with the upcoming legislative deadline, with ease.
Vostron's MiFID II compliant Call Recording Service stores your data for 5 years, on our highly secure, cloud-based storage platform. This data can only be accessed via a secure web interface, all of which is monitored and managed by Vostron's industry leading technical team.
This product has been specifically designed to allow FCA regulated businesses to comply with the upcoming legislation.
To find out more simply click here.
If you are a Vostron customer, then call-recording is already a dormant option, included in the telephony service we provide - all that is required is the authorization to activate this feature. Alongside this, and to be MiFID II compliant, you will need to set up long term storage for each of the handsets that would fall under the new regulation.
Whether or not you are a Vostron telephony customer, the same steps above will apply. The only additonal action required is to get in touch, so that we can determine what solution is appropriate and how we can integrate with your existing service. Alternatively we can advise on Vostron's own Hosted VoIp Telephony service.
Becoming MiFID II compliant with Vostron is a simple, straight forward procedure and on average you can be set up and ready to go in under 24 hours.