Written by Rob Houghton
The amount of data regulated companies must manage is staggering and growing. Businesses are facing many operational, legal and compliance obligations.
Privacy is the overriding concern of every business especially data-rich businesses such as financial services firms and health care providers. Financial service firms are struggling to meet a broad range of trade-related investigatory demands, with growing requirements expanding throughout the enterprise. No longer just a regulatory or legal initiative, the ability to quickly and accurately reconstruct trade records and events is essential for multiple segments of the business, including risk departments and operations.
Efficient and comprehensive trade investigation includes data generated in multiple platforms, including related pre- and post-trade communications - across all electronic communication modes such as voice, emails, instant messages, Bloomberg communication, files and trade records/events.
In light of the financial crisis, the Markets in Financial Instruments Directive (“MiFID”) was implemented on the 1st November 2007 as part of the European Single Market Programme to remove barriers to cross-border financial services within Europe.
This legislation is for Investment intermediaries that provide services to clients around shares, bonds, units in collective investment schemes and financial instruments. Overseeing a playing field between EEA trading venues by ensuring appropriate levels of protection for consumer, investors and financial instruments.
Due to the vastly growing complexity of technology and financial innovation a revision of the proposal of MiFID II was introduced in April 2014, to improve investor protection, increase market resilience, and reduce systematic risks of the transparency governing financial markets.
It is estimated that there are now as many mobile phones in the world as there are people, with over 7 billion believed to be in use. This global domination has taken fewer than 20 years to happen and the growth is yet to slow down.
Mobile phones are at the heart of all businesses and the task for organisations required to capture, index, archive and restore every call is far-reaching.
One of the new requirements under MiFID II will be to record all electronic communications involving transactions, which relate to the execution of clients orders or conversations intended to result in an exchange of transaction. This will include telephone conversations, face-to-face meetings and all forms of messaging.
Not all firms are affected by the revised MiFID II regulation however, many firms (including retail, financial advisers, insurance brokers, solicitors and loans companies) are using mobile voice recording to support and provide evidence of advice offered.
The risk of market abuse is deemed higher for corporate Finance groups as they have access to sensitive trading information. The introduction of this legislation protects consumers from any disputes between a client and firm's provision of service.
Records of all data need to be kept for at least 5 years depending on the country and the retention policies. Firms will also be expected to respond to any client requests for copies of tapes.
According to FCA this consultation affects a wide range of firms particularly:
• Investment banks
• Interdealer brokers
• Firms engaging in algorithmic and high-frequency trading
• Trading venues including RMs, MTFs, and prospective OTFs
• Prospective DRSPs
• Investment managers
Soteria Multimedia recording platform is used by over 150 of the world’s top tier 1 and 2 global banks as well as government agencies, legal institutions and pharmaceuticals around the world. Soteria technology is suitable for organisations that wish to record and archive business communications as part of their risk management strategy.