MiFID II Record Keeping for modern markets
While MiFID I offered some flexibility on record keeping, MiFID II is far more stringent. MiFID II’s record keeping requirements state that all communications that relate to the “reception, transmission and execution of client orders” need to be recorded.
MiFID II states that it is mandatory for firms to record all telephone calls and electronic communications that might result in a transaction. This must be done regardless of whether or not the transaction is actually completed.
These rules – laid out both in MiFID II and the accompanying MiFIR – are designed to increase market transparency and protect against insider trading and market abuse.
mifid ii record keeping requirements
The record keeping requirements laid out in MiFID II insist that great care is taken to keep close records of all relevant communications. Firms are required to take the following actions as of January 2018:
Minutes or notes should be used to record face-to-face conversations. ESMA states that firms will need to keep records on the date and location of meetings, the identites of the people in attendance, and all relevant information on the proposed transaction. MiFID II deems these conversations to be equivalent to orders received by telephone.
All communications regarding transactions will need to be stored for a minimum of 5 years – a substantial increase from the current period of 6 months. They must be held on record for up to 7 years If requested by an NCA (National Competent Authority). Records should be made available to clients on request.
The records must be easily retrievable and fully monitored. There is an industry-standard time frame of 72 hours – it must be possible to retreive all records within this time frame.
A crucial part of the MiFID II record keeping requirements is that the records cannot be manipulated or altered. Since the data relating to trade and communications is so sensitive, it must be stored in WORM (write once, read many) format, which is considered to be fully tamper-proof.
Our MiFID II Record Keeping Solution
eflow will allow your firm to stay on top of all of MiFID II’s stringent record keeping regulations.
ESMA states that firms must keep records on the following:
- Orders.
- Both scheduled and completed trades.
- All communications. These include phone calls, faxes, messages, emails and physical mail.
- Documentation. This includes research, minutes of meetings, sales and marketing communications.
eflow will simplify all these forms of record keeping, allowing your firm to rest assured that they are compliant with MiFID II’s record keeping legislation.
eflow ensures that all data storage fully conforms to the standards of WORM (Write Once Read Many). This means that sensitive information will be kept fully secure for your staff members and clients.
Search and retrieval is flexible and instant, and it’s easy to extract information, so you can keep to the strict regulatory time frames set out in MiFID II. All data is written to disk, and storage is digital and completely immutable.
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