In 2011, the European Parliament reached an agreement to further develop the Markets in Financial Instruments Directive 2004/39/EC (MiFID) in order to create a more transparent market and better protection for investors.
With its implementation in January 2018, MiFID II has introduced numerous legislation changes that financial services organisations must abide by. One such change is the further tightening of the current record-keeping regulations where firms are now obliged to have a consistent means of capturing, retaining and reproducing records of all activity - whether they are face-to face communications, telephone or electronic communications.
The MiFID regulations have been expanded to include additional record-keeping rules, including such key changes as:
MiFID II requires firms to keep a record of all communications that either conclude in a trade or confirm a transaction, as well as record communications that may lead to a trade in the future. These include telephone conversations and electronic communications, including instant messages and social media interactions.
The National Competent Authority (NCA) or Approved Reporting Mechanism (ARM) will use submitted company records to ensure firms are complying with their obligations.
Article 40(5) means firms must retain transactional details based on a list of minimum records required.
Records are to be kept in a durable medium which allows for replay functionality but which also prevents the record from being altered or manipulated. These records must also be readily accessible and available upon request.
Firms are now obliged to keep all records of communications for up to seven years (dependent upon local regulatory body requirements). Firms must ensure that both firm-issued and privately owned equipment, whether internal or external, is retained for permanent and contracted employees.
This guide looks deeper into Article 16 of the Directive, where firms are legally required to record all electronic communications in the pre-, during and post-trading stages of their transactions, to provide a comprehensive view into:
Firms need to be recording and retaining the correct type of data records for MiFID II compliance as well as for legal admissibility in dispute resolution.
However, there is a misunderstanding amongst businesses who confuse the term of “backup” as an “archive” and therefore believe their existing data makes them fully compliant with the Directive - which is not the case.
This blog helps firms to understand the correct terminology and difference between a backup and an archive as well as how they are best used within a business and why archiving is not only essential for demonstrating MiFID II compliance, but also for legal purposes according to The Code of Practice on Evidential Weight and Legal Admissibility of Electronic Information (BS 10008:2014).
With MiFID II implemented, firms assume that their current CRM systems provide them with enough information recording facilities to meet the requirements of Article 16.
But this is not the case and firms need to be quick to implement a solution that can help them fulfill their compliance requirements.
This blog explains why a CRM is limited in its capacity to record electronic communications in a way that is MiFID II compliant and why they need to be archiving their website and social media content instead to ensure the authenticity and integrity of their recorded information.
Firms should be taking the right steps to recording their electronic communications in order to protect themselves from any potential legal or regulatory risks.
This blog details 13 companies who did not record their electronic communications and, either failed to prove the authenticity of their records in
Electronic communications is now a part of everyday life, including how firms in the financial services sector do business.
This blog helps firms to understand why they must be able to regulate, monitor and record electronic communications in a way that is compliant for MiFID II and legally admissible with web archiving and to help answer questions and hesitancies from the board, such as:
"Aren't we compliant with backups?"