MiFID II Mobile Recording

MiFiD II - What is it?

MiFiD (Markets in Financial Instruments Directive) was implemented into UK law in November 2007 and set out regulatory framework for providers of financial services across the EU. Those affected institutions included Investment firms, Regulated Markets (RM’s) and Multilateral Trading Facilities (MTFs). MiFiD was intended to bolster competition across EU trading hubs (London, Frankfurt, Paris, etc) and ensure that there was adequate levels of protection for investors particularly unsophisticated consumer investors who benefited from increased transparency. In 2011 the commission put forward a number of revisions to MiFiD which were agreed on 2014 as MiFiD II. MiFID II was agreed and entered into force on the 2nd July 2014 with the the initial date penned for implementation by the Member States being 3rd January 2017. This was later moved one year later to the 3th January 2018 due to the technological difficulties firms found when attempting to implement these changes.

The revised MiFiD II legislation set out four main objectives;

• To strengthen investor protection
• Reduce risks of disorder
• Reduce systemic risks
• Increase efficiency and reduce un-necessary costs

Key Dates for MiFiD II

November 2007 - MiFiD Implemented into UK law
2011 - Revisions proposed to existing MiFiD Legislation
2nd July 2014 - MiFiD II revisions accepted and enforced
3rd January 2017 - MiFiD II Implementation date for EU Member States (Later revised)
3rd January 2018 - Revised (current) MiFiD II implementation date for EU member states

How does it affect me?

Whilst MiFiD II sets out a wide framework of regulations for financial institutions, one of the most significant changes comes to the recording of communications. We’ve broken these changes into the points below;

1. Previously in MiFiD (pre MiFiD II) only conversations by participants directly linked to a trade would need to be recorded. MiFiD II extends this to anyone deemed to be in the “Advice Chain” when considering the trade as a whole.
2. The retention period for call recordings has been substantially increased. Current MiFiD regulation states 6 months but MiFiD II again extends this to a minimum of 5 years with many institutions having to store recordings for 7. (we have both 5 and 7 year retention plans available for our MiFiD II mobile call recording solution).
3. Current regulations state that compliance officers need only store the calls to be reviewed if necessary whilst MiFiD II implies that data should be periodically reviewed and monitored. (Our advanced in call analytics service provides this automatically).
4. A requirement to demonstrate that policies are implemented and call recording equipment is maintained in line with Data protection (Our service solves this - speak to an adviser to find out more).