MiFID II Communication Reporting: Stay Compliant

As part of MiFID II’s aim to generate greater market transparency, firms are now required to record all voice communications which result in a transaction being completed. These requirements extend to include trades made by telephone, text, any kind of instant messaging and video calling.

In order to fulfil these stringent reporting requirements, in practice, firms must provide comprehensive proof that all communications which may result in a trade being made are being closely monitored and recorded. The customer must be informed that these calls are being recorded, must be able to store the recording securely, and be able to retrieve the recording upon request.

However, the FCA found that, in 2018, over 1,000 investment firms were falling short of ESMA’s communication and transaction reporting requirements. What is the cause of this poor reporting quality? 

One potential explanation is a lack of recording checks. It is not enough to assume that calls are being recorded; daily checks should be implemented to ensure that recording is being executed properly. 

Better organisation of recorded files should also be practised to ensure the timely and secure retrieval of the sensitive stored data. 

By implementing an automated testing system to ensure that recording systems are working correctly, firms will be able to avoid heavy penalties being imposed upon them by National Competent Authorities, such as the £34,344,700 fine levelled against Goldman Sachs by the FCA.

Clashes Between EU and UK Asset Managers Over MiFID II Unbundling

Disagreement Over Research Unbundling Between UK and EU Fund Managers As part of the regulatory framework enacted by MiFID II in January of 2018, asset managers were required to separate the cost of research from other costs such as trading commissions. This...

COVID-19 Exposes Gaps in Market Data Supply

Market Data Vendors Struggle to Keep Up Amid Coronavirus Pandemic Since the outbreak of COVID-19 has spread and made its impact known on global markets, a number of banks and investment firms have been required to fall back on Business Continuity Measures (BCP). As a...

Best Execution Reporting During the COVID-19 Pandemic

ESMA Releases Public Statement on MiFID II Best Execution Reporting During COVID-19 Pandemic The disruption to markets caused by preventative lockdowns in response to the Coronavirus pandemic has caused execution venues and firms a great deal of uncertainty with...

ESMA Publishes Opinions on Position Limits under MiFID II

Updated Opinions on Position Limits Under MiFID II Published by ESMA On February 7th, ESMA published seven opinions on position limits regarding commodity derivatives under MiFID II/MiFIR.  The opinions published by ESMA agree with a number of proposed position limits...

Non-Compliance Fines Exceed $36 Billion Since 2008 Financial Crisis

Global financial institutions have been fined over $36 billion since 2008 At the close of the decade, global fines for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC) and sanctions regulations have exceeded $36 billion since the financial...

Get In Touch