The Financial Conduct Authority (FCA) issued an update on the MiFID II requirements on 31/03/2017.
The policy statement publishes near-final rules on the new regulations, and includes an update on the requirements around the recording of telephone conversations.
What had been proposed?
The original MiFID II proposals would have made all retail financial adviser firms and corporate finance boutiques record telephone conversations with clients and prospects.
Advisers and industry bodies had lobbied against these plans, saying that they were disproportionate and would be difficult for smaller advisers to comply with.
Now it seems that the regulator has capitulated.
A change of heart
The FCA had asked for consultation feedback on the new rules, and the statement released this week says that ‘Having considered consultation feedback in the context of MiFID requirements, the FCA agrees that the business model of many of these firms means that a full taping obligation may not always be appropriate’.
Retail financial advisers will now be able to choose whether they tape all relevant phone conversations or, alternatively, take a written note of them.
Does the change apply to all MiFID II firms?
The flexibility only applies to smaller firms, and not to ‘MiFID investment firms who can be characterised as retail financial advisers’.
The full detail around what is required in the notes is still being determined.
Record-keeping to be tightened up
However firms choose to comply, the FCA made it clear in its statement that the notes will need to meet the objective of ‘advancing our consumer protection objective. Firms will not be able to rely solely on their current record keeping requirements to meet this objective’.
So more rigour around phone call record-keeping will be needed, however you choose to approach the regulations.
The regulator will include its finalised rules on taping in a policy statement scheduled to be published in June.
At LS Consultancy, we offer a number of distinct products and services which can be deployed individually or combined to form a broader solution including copy advice.
When you face business or regulatory challenges, we provide solutions that are tailor-made to your needs with a view to releasing your energies to focus on your clients.
We work both within individual teams and across many departments to offer a complete solution, with a range of cost effective, compliance and marketing solutions which are uniquely suited to supporting firms.