Part of the consumer protection is ensuring all communications which may lead to a financial decision being taken are recorded and retained for 5 years – this applies to email, IM, SMS, and all telephone communication.
“Anyone involved in giving financial advice that leads to – or may lead to – a transaction must record their conversations and securely store these communications for at least five years.”
Originally, the implementation date for this legislation was January 2017, however this has been extended by 1 year to allow firms to finalise any necessary preparations.
A recent survey of 183 senior financial services professionals by corporate finance adviser Duff & Phelps revealed some worrying results – two thirds of firms are unlikely meet the January 2018 MiFID II deadline.
The main reason for this seems to be the cost of compliance. Respondents are currently spending around 4% of total revenue on compliance, however, this is set to rise to 10% by 2020. Many firms are already struggling with the amount they are currently spending and there is a knowledge gap regarding how firms should allocate their time and money when complying with regulation. The cost of Brexit and cyber security has also added to the strain, with almost 9 in 10 financial services firms saying they intend to increase the amount of time and resources spent on cyber security next year in anticipation of the new regulation.
For firms not meeting the MiFID II deadline, significant financial penalties will be imposed – hiking up the cost of compliance even more.
For cost effective compliance solutions, and advice on how to avoid fines by ensure your business is compliant with the new MiFID II regulatory framework by January 2017, ask our team for advice. We have people on hand to answer your questions, and talk you through the best and most cost effective solutions for your business.
* http://www.investmentweek.co.uk/investment-week/news/3009054/two-thirds-of-firms-unlikely-to-meet-mifid-ii-deadline