Talk about your big data. The European Union has been consistently expanding its requirements for financial institutions to record communications related to transactions since around the time of the global financial crisis of 2008 and 2009.
MiFID, or Markets in Financial Instruments Directive, went into effect in the European Union in November of 2007. MiFID is a broad initiative that aims to create authorization requirements for regulated markets; business and organizational requirements for investment firms; regulatory reporting to avoid market abuse; rules on the admission of financial instruments to trading; and trade transparency obligation for shares. MiFID also talked about the need to capture phone conversations, but it provided EU member states with the ability to decide which phone conversations to record.
Then, in 2011, financial regulators in the U.K. said all relevant mobile communications (both SMS and voice) between traders had to be recorded.
More recently, regulators have gone a step further and introduced MiFiD II. This new regulation make recording of mobile conversations related to financial transactions mandatory on both personal- and company-owned devices. MiFiD II requires organizations to store these interactions for five years. It also covers conversations between both wealth managers and independent financial advisors and their clients.
The Council of European Union adopted the final texts of MiFID II in April 2014. January 2017 had been set as the implementation deadline for MiFID II, but there has been talk about pushing it back.
Naturally, the tighter requirements that come with MiFID II have not arrived without a fight. As Out-Law.com reported in July of 2015, the Financial Conduct Authority challenged these call recording requirements, but ultimately lost the battle. The article mentioned that The Association of Professional Financial Advisors has also weighed in on MiFID II requirements.
Edited by Alicia Young