Beginning January 3, 2018, the United Kingdom will begin enforcing a new set of regulations for Financial Services firms. The latest version of The Market in Financial Instruments Directive, known as MiFID II, is legislation designed to strengthen investor protection, maintain orderly markets, reduce risk, and increase market efficiency. The legislation emphasizes transparency to promote market stability through new rules regarding technology, cross-border controls, and conducting business in the UK (as well as the EU).
A Key Component To The Rules Involves Archiving All Communications
Organizing and preserving communicaions is crucial to meeting the new legislation. Pertinent requirements of MiFID II include:
· Transaction reporting
· Instrument reference data
· Transparency calculation data
· Double volume cap data
· Commodity derivatives position reports, and
· Order record-keeping
Additionally, the ESMA has created new technical standards that companies must follow. Records must be kept of all the rights and obligations of the firm and the client, any deals companies make with clients, transactions and order processing, telephone conversations and electronic communications. All digital records and communications must be kept in a durable medium and retained in a format that prevents altering and is easily accessible.
Note: Some requirements for record keeping state that all records must be easily accessible to a competent authority, the records must not be manipulated in any way, and records must be kept irrespective of technology used.
Firms That Don’t Comply With MiFID II May Face Fines or Dissolution
Companies that do not comply with MiFID II may face significant fines or even dissolution. It should be noted that the UK’s Financial Conduct Authority (FCA) has “a wide range of enforcement powers – criminal, civil, and regulatory – to protect consumers and to take action against firms and individuals.” Thus, to reduce risk of non-compliance at the January 3rd deadline, being proactive is the only solution.
Merge1 Helps You Easily Comply With MiFID II’s Archiving Regulations
Globanet Merge1 can help your Financial Services organization easily meet the new communications archiving requirements of MiFID II by helping capture all of your firm’s electronic communications, from multiple platforms, and storing them in your existing email archive. This includes archiving social media (e.g. Twitter, LinkedIn, etc.), text, IM, financial platforms (Bloomberg, Symphony, etc.) and cloud-based file services (e.g. Box.com). Once archived, your workforce’s digital conversations can be retained and supervised according to the MiFID II message retention and oversight rules.
In closing, we encourage you to comply with MiFID II’s social media and communications archiving regulations before the January 3, 2018 deadline to avoid potential fines and dissolution. Merge1 can help you gain compliance easily, by leveraging your existing infrastructure.
Contact us today to learn more.