Welcome to the first post in our MiFID II blog series, exploring the history of voice compliance, how recent developments affect businesses and how to prepare. There’s only a year until new regulations officially apply (on 3 January 2018), so it’s important to make provisions now.
MiFID II (the second Markets in Financial Instruments Directive) will have a profound impact on banks and hedge fund teams, as well as other financial companies. It will apply to more than 300 trading venues and 15 million financial instruments, as well as all the businesses that make use of these instruments and venues.
One of the areas of change is around call recording. Under MiFID I, the requirement to record calls was limited to landlines within the trading room; mobile phones would have to be left outside to stop calls being placed to other contacts, but otherwise wouldn’t have been monitored. This was partly driven by the complexities of recording calls placed via mobile phones. For companies that wanted to record calls made by users on mobile phones, the options were very complicated.
Previous approaches to mobile call recording have included the users being able to install an application on their phones to handle the call recording. This was first introduced in 2011 and was only available to those running Android-based phones. Alongside only being available on a limited range of handsets, it also added a wait of around thirty seconds for each and every call to connect.
Teams could also run a service based on a mobile virtual network operator (MVNO) model. MVNOs piggy-back on network operator infrastructure and could supply a service so any call would be directed through one line to be recorded, while another line would go through to the call contact. However, while this model could work for recording some calls, it didn’t integrate with many networks worldwide – and if the operator behind the MVNO didn’t have a roaming agreement in place then the service wouldn’t work. More importantly, this model didn’t cover calls into the phone (only those going out).
Today, technology has evolved and now it’s possible to record calls to and from mobiles at network level – rather than relying on the specific call routes themselves. By making it easier to handle the recording of each call, the technology has caught up with the requirements of both users and regulators. It also solves some of the problems around recording calls when users are travelling internationally.
The development of these mobile call recording solutions means that it’s now technically possible for all companies involved in trading activities to record and keep all calls for compliance requirements – without affecting everyday calling. For banks and hedge funds, implementing mobile voice recording ahead of the January 2018 deadline is not only essential, it’s now also easy to do (with the right solution).
To find out more about what MiFID II will mean for your business, get in touch today.
And keep an eye on our blog for the next instalment in our MiFID II blog series.