Will You Be Compliant In Time For The MiFID 2 Deadline?
The MiFID 2 deadline is set, in stone it would seem, for January 3rd 2018. Despite there being rumors of another MiFID II delay, the chair of the European Securities and Markets Authority (ESMA) Steven Maijoor has stated clearly “Contrary to some recent coverage and commentary, MiFID 2/MiFIR will come into effect on 3 January 2018, there will be no further delay in its implementation.”
Now, you may be asking:
What Is MiFID 2 regulation?
MiFID stands for The Markets in Financial Instruments Directive. MiFID 2 is a regulations update to the original directive (which some refer to as MiFID I), which will be introduced into the UK by The Financial Conduct Authority (FCA) this January. The original directive (MiFID I) was introduced in November 2007 and is considered one of the cornerstones of the European Union's regulation of financial markets.
What if your business has nothing to do with financial markets? Well, the implications of this directive reach far and wide across many industries, but more on that in a moment.
The literature for MiFID ii runs for thousands of words, and some people, understandingly, find it time consuming and difficult to pour through that amount of legislation and ‘legal speak’. Basically, the directive covers a broad spectrum of areas relating to the regulation of companies operating in the financial sector. Since this is a telecoms blog, the main takeaway for businesses is this:
All Companies Dealing In Financial Products Need To Keep Detailed Communications Records
The Financial Conduct Authority will require companies to keep records of any transactions or potential transactions between buyers, sellers and any ‘middle men’ involved for as long as 7 years, even if those transactions don’t result in a sale or trade. To be MiFID ii compliant, firms will need to keep records of all fixed line and mobile phone calls, conference calls, video calls, and all correspondence and communications of any kind. The regulations are set out in such a way to allow for the inclusion of any additional communications methods used in the future.
Bigger companies are required to record everything but smaller firms, ‘article 3’ companies, are currently allowed to take detailed notes from every call, which must include at minimum: The date, time and location of the meeting, the identity of those present, including the identity of the initiator and must include all the relevant information regarding the customer's order. This may seem like a relief to some, but the truth is that manually taking these notes accurately whilst keeping them orderly and well archived for up to 7 years is going to prove a nightmare for many of these smaller companies granted such ‘relief’.
Call Recording As a Business Practice
Call recording as a business practice is an excellent idea whether you are legally obliged to or not. The many benefits of call recording for businesses could be a whole blog topic of its own but a few examples would be:
• Regulatory compliance, both existing and future
• Legal protection from corporate liability, in cases of customer misunderstandings or outright lies
• Monitoring of customer service standards
• Market research
• Staff training
It’s important to note, that although MiFID ii legislation only relates to businesses involved in financial markets, the concept could potentially be introduced into any regulated sector involving customer transactions/interactions in the near future.
Future proofing your business in as many areas as possible is one of the keys to a long running and successful company. Remember when Nokia were global leaders in mobile phones? Where are they now? Future proofing is SO important for business. Stay ahead of the curve or fall behind the competition!
There’s a good chance that if MiFID II is going to affect your business come the 3rd of January 2018, you are already aware of it. If you want to take an in depth look at all of the finer points, you can find full details on the official FCA pages dedicated to MiFID.
In terms of how we at Intouch can best serve you, both our traditional on site business phone systems and hosted VoIP systems offer future-proof telecoms solutions that will not only help you stay compliant now and in the future, but will help you make the most of each and every instance of valuable customer contact your company receives.