A Look At MiFID Phone Recording Requirements During The Pandemic

 

The coronavirus pandemic came with multiple challenges to financial service firms, especially when it comes to compliance to MiFID phone recording requirements. Credit institutions and investment firms are supposed to record all telephone conversations connected with the investment services and activities’ performance, except the operations of Multilateral Trading Facilities and Organised Trading Facilities. This pandemic together with the resulting work from home setups have made it so challenging to comply with MiFID II’s regulatory requirements.

If you have a financial institution, you need to take reasonable steps to record voice calls, prevent employees from making, sending, receiving phone calls on a privately-owned device that the firm cannot record. Taking into consideration the circumstances that the pandemic brought by, ESMA, or the European Securities and Markets Authority, recognizes that recording relevant telephone conversations may not be practicable for firms. Even though capturing phone calls may not be attainable, ESMA expects companies to take alternative steps to record calls.

Financial service firms first faced problems with setting up a new working environment for their employees. There were many issues that were experienced with remote working, with some of them being the slow trading speeds and balancing the firms’ regulatory obligations with the traders’ right to privacy. It became a challenge to monitor market abuse since the traders were now free from the physical supervision and monitoring on a trading floor.

Another challenge is the families of the traders could hear the phone calls or see the screens containing market-sensitive information. Even though confidentiality is always crucial in financial service firms, traders may not be able to keep their activities secure, mostly when they use their personal electronic devices. Financial institutions need to address the new issue brought by the pandemic to make sure that they can monitor employee communications and comply with MiFID call recording requirements.

For more information on the MiFID phone recording requirements during the pandemic, visit our website at https://www.telemessage.com/

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