MiFID II Compliance And Call Recording - What You Need To Know

For financial advisors, the rules surrounding telephone calls with potential or existing clients are about to change. There’s going to be new policies implemented very soon, and so it’s important that you’re up to date on what’s happening and how it affects you. We’re going to be taking a look at these facts here, and now, so you’re entirely caught up.

So, The Laws Are Set To Change?

From January of 2018, independent financial advisors are about to see some changes. As a rule, you’re now legally obligated to record all phone calls with potential clients and customers that may lead to any business being conducted. The rules have been put in place to try and ensure certainty when trading, as well as to create investor protection and also to prevent market abuse from taking place. To comply with the new rules, all conversations must be recorded and kept, regardless of the result of the communications with that customer. These phone calls must be stored for five years, and in some instances a further two years after that, although that is only when it’s demanded by a MiFID II Member State Authority.

So, Why Is This Happening?

Of course, not everyone is immediately going to understand why this procedure is being put into place next year. As we mentioned earlier, there’s going to be a level of certainty and investor protection created. Investors especially want to know that a company is going to make money and that they’ll get their investment back, so phone calls which detail potential trades and confirmed business will help to put their minds at ease. Plus, it allows for more detailed records to be made with regards to each transaction. Having the phone conversations recorded and stored means that there’s hard evidence of business being conducted, or interest in a specific service.

It also helps to prevent market abuse, as people would sometimes manipulate facts and figures to make their company seem like a more worthwhile choice when it comes to making investments or conducting business. This helps to maintain a level of honesty and means that any potential clients and customers know exactly what they’re going to be getting into when it comes to using financial advisors.

Overall, the new rules which will be coming into place do make the playing field for financial advisors a much fairer place, and this means that it’s also easier to keep investors on side and secure potential business and deals.Furthermore, you’ll be complying with the law and won’t run the risk of legal action taken against your organisation. Of course, if you’re going to comply with these requirements, you’re going to need a capable system to record all the calls. Hive Communications can provide you with an entirely modern phone system which will enable you to record calls and retain them, so you’re in full compliance with the law and have a straightforward system to use.

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