As of 3rd of January 2018, the new MiFID II (Markets in Financial Instruments Directive II) legislation changed the way businesses in the UK are expected to handle/store their recorded calls.
MiFID II is a revamped version of MiFID. The latest version enforces stricter regulations, due to the ever growing risk of cyber crime throughout the UK and the EU.
What are the key features of MiFID II?
MiFID II aims to improve transparency, investor protection and market fairness. Here are its key features:
- Wider scope: MiFID II covers a broader range of financial instruments and professions than MiFID I. It applies to almost all aspects of investment services within the EU and UK.
- Trading transparency: A core objective of MiFID II is to increase transparency in financial markets. It encourages transactions to take place on regulated exchanges. This reduces the risk of hidden practices.
- Reporting requirements: MiFID II imposes stricter reporting requirements on investment firms. This allows regulators to monitor market activity more effectively and identify potential risks.
- Focus on specific practices: The legislation addresses specific practices like high-frequency trading and commodity speculation, aiming to ensure these activities are conducted fairly and transparently.
Who does MiFID II apply to?
The MiFID II legislation applies to a wider business area than the 2007 version, which was only applicable to the financial sector. Under MiFID II commodity businesses, insurance brokers, mortgage brokers, estate agencies, corporate finance businesses, investment firms and any business who deals with products that have an investment element, will also need to comply with the new regulation.
Businesses within this vertical in the UK and EU must record all communications between their clients. A record of those communications must be readily available for search, analysis and retrieval when requested by a regulator of the MiFID II. This regulation also applies to sales calls.
Does the legislation vary between the UK and the EU?
Although the MiFID II was created by the EU, it still applies in the UK.
The UK didn’t adopt the EU’s MiFID II directly. Instead, they incorporated the framework into their own domestic law during the Brexit process. This means there’s a near-identical, parallel system for UK-based financial firms. However, this means there may be some minor differences.
The Financial Conduct Authority (FCA) is responsible for overseeing MiFID II implementation in the UK. They have issued their own rulebooks and consultations to address specific aspects, such as research and best execution practices. You can find updates on the FCA’s website.
How can my business achieve MiFID II compliance?
Following the steps outlined by the FCA will ensure you are compliant with the MiFID II legislation.
However, you also need the right processes and solutions to achieve it.
At Infinity Group, we can support you in achieving compliance. We provide a range of services, covering telephony and business operations, making it easier to record your activity and ensure transparency. We leverage Microsoft technology so you can be sure of efficiency and security.
Get in touch with our consultants today to ensure you’re meeting the requirements of MiFID II.
