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MiFID II in a nut shell

MiFID II in a nut shell

MiFID II – the what, when and why

If you work in the financial sector, chances are you've heard of MiFID II by now. If you haven't, don't fret – this post has you covered. Whether you're aware of MiFID II or not, it will soon be affecting your organisation and time is of the essence.

Luckily, as expert MiFID II mobile recording partners for some of the largest financial organisations in the world, Truphone knows a thing or two about the new regulations. Here, we explain what exactly MiFID II is, when it comes into play and how you can be prepared.

What is MiFID II?

MiFID II, or the second Markets in Financial Instruments Directive, is a new set of legislative regulations. Adopted by the European Commission, the aim is to prevent breaches, disorderly trading and market abuse in the financial sector. It brings the existing regulations (MiFID) up to speed following the financial crisis and in light of developments in the financial sector.

When does MiFID II take effect?

MiFID II is in force from 3rd January, 2018. This may be over half a year away still, but if your organisation is set to be impacted by this, the clock really is ticking.

Who does MiFID II affect?

MiFID II affects a range of firms that provide or advise on financial instruments or services in the EU. You'll be impacted if you're:

  • An investment firm
  • A credit institution
  • A portfolio manager
  • A broker-dealer
  • A stock broker
  • A corporate finance company
  • A market operator
  • A central counterparty

Some smaller financial firms, such as small independent financial advisors, will escape some of the more onerous regulations requiring them to voice record all of their calls and conversations. They will still have to keep a manual log of all transactions however.

What are the MiFID II requirements?

MiFID II requires organisations to adopt a range of practices that are already part of financial regulations in countries like the UK. As well as keeping full records of all transactions and trades, now financial organisations must keep full records of the conversations leading up to a transaction.

One of the key requirements of the MiFID II regulations is the need for an all-encompassing call recording solution. You will be required to:

  • Record telephone calls, mobile calls, SMS and electronic communications.
  • Keep records of these calls for five years – seven years if requested by an NCA.
  • Tell your clients or customers that you are recording their calls, along with providing them with recordings if requested.

These measures will relate to all calls where you intend to instigate a trade or provide a service. It will also likely include portfolio managers. 

MiFID II recording explained

Under MiFID II regulations, all communications that are intended to lead to a transaction, even if a transaction doesn't ultimately occur, must be recorded. This means that mobile call recording must be in operation at all times to meet the regulation requirements.

Many call recording solutions can impact on call quality, creating delays or interference in the line. Other solutions use apps, which members of staff may forget to turn on.

Thankfully, Truphone's solution uses our unique and patented Call Forking technology. This ensures that there's no degradation in call quality and every single call and SMS from your phone is recorded on either your on-site server or hosted in our cloud - for you to access at any time.

Another legal requirement of MiFID II regulations is that you play a pre-recorded message to your customers, making them aware that the call is being recorded. Truphone's solution offers a variety of options, in multiple languages, to meet your organisation's protocol.

Finally, just like our network, our recording solution is completely global, with every single call being recorded - no matter where you are.

A mobile recording partner that will help you meet your business' needs

As mobile recording experts with industry leading patented technology, we're confident we can help your business – no matter how large or small – meet the MiFID II regulations, seamlessly and securely.

For more information on adapting to the new MiFID II regulations, request a call back or continue reading about Truphone Mobile Recording.

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