From high frequency trading, to the commodities markets and beyond, MiFID II has sent shockwaves throughout the financial services industry. Despite these issues stealing the headlines, there are also a raft of comparatively under-discussed changes that could, if handled improperly, add an unnecessary burden to company operations and balance sheets. James Foley, vice president of Customer Experience at smartnumbers, provided by BT, outlines the issues.
One particular change that has yet to start much debate is the issue of phone recording. The creators of MiFID II have bolstered and expanded the reach of the phone recording requirements to cover any conversation in which the goal is to secure a transaction. Furthermore, the new laws require all those affected to store these recordings for five years. When first proposed, the increased operational burden spurred some parties to put up a fight, including our own Financial Conduct Authority (FCA). However, earlier this year, the FCA returned from Europe, hat in hand, having admitted defeat on this issue.
Since that loss, there has been some good news. After comments from the European Securities and Markets Authority (ESMA) and the European Commission, it almost seems inevitable that MiFID II’s implementation will be delayed by a year. For the first time in a while, the various operational and compliance divisions are now able to take a breath. While the scope of the delay is still up for debate, it does give financial services firms more time to prepare adequately and effectively for the changes.