Make sure your business doesn’t get caught out by MiFID II.
On January 3rd, 2018 a raft of new financial regulations will kick into gear. These European Union laws, commonly referred to as MiFID II, strengthen and widen the regulatory standards required within the finance sector.
Unless your business is ready for this change, you risk facing non-compliance fines of up €5 million or 10 percent of your company’s annual turnover. So with the deadline looming, here’s what you need to know.
What exactly is MiFID?
It’s an acronym for the Markets in Financial Instruments Directive (MiFID). This is a complex set of regulatory standards that were first introduced by the European Union in 2007 to create a more transparent, efficient and secure financial market.
Following the 2008 global financial crisis, EU regulators started to work on tightening and expanding the scope of this legislation. This includes beefing up the rules governing the way that financial information is tracked, monitored and stored.
When is the deadline?
This updated legislation (MiFID II) goes live on January 3rd, 2018. The deadline has already been extended by 12 months to give businesses a fair chance to prepare, so there’s no ‘wiggle’ room for those companies that do get caught out.
Who is affected by MiFID?
The reason it’s liable to catch so many businesses out is that the financial regulations have been widened to include many companies who are currently exempt. It now covers all of the steps leading to a transaction – not just the final contract.
So it doesn’t just encompass investment companies and banks but all of those organisations that provide any kind of advice relating to ‘financial instruments’.
Doesn’t Brexit remove the need to comply with this?
No. When the MiFID II legislation lands on January 3rd, UK companies will have to comply in exactly the same way as any other nations within the European Union.
The Financial Conduct Authority (FCA) has released a statement to reinforce this message. And with the current two-year negotiations likely to be extended, possibly by another two years – MiFID II will remain for the foreseeable future.
What needs to be done to comply?
The MiFID II legislation covers a multitude of different areas but the most immediate impact is the change to ways that any communications relating to ‘financial instruments’ must be tracked, monitored and stored. Article 16(7) of the Directive states:
“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.”
Businesses must be able to monitor all calls and to record any conversations that relate to a potential financial transaction. This information must be stored and accessible for a minimum of five years.
What’s the best way to manage communications?
If your current call recording system isn’t able to handle the heightened compliance requirements of MiFID II then you need to switch to something that can. Finding a solution that will securely future-proof your business is something BDM Voice is geared to helping you do.
To make sure your business will be compliant in time get in touch today.
Call 03301594000 or email email@example.com