30 September 2016
Chris Pickles

Chris Pickles

Chris Pickles - Picklesnet Ltd

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Dodd-Frank, MiFID II and regulatory mobile voice recording

15 January 2013  |  4043 views  |  0

I’m in Paris today at a customer event about the impact on IT of financial market regulations.  We all spend so much time talking on mobile phones that we forget how much they have become part of the normal work environment, particularly for providing service to customers.  Dealers and back-office staff, wherever they may be at the time, need to sort out customer issues whenever they occur.  A recent example was during Hurricane Sandy in the USA, when a large number of staff from many firms either couldn’t get into their offices due to disruptions in the transport system on the US eastern seaboard, or even if they could reach their office then key elements of their systems were down due to flood damage.  “Dealer at home” systems helped to keep some investment firms alive in the market until their core systems could be brought back up.

Regulators have also recognised that the financial markets have not all moved totally to electronic trading – far from it, in many sectors.  And customer-facing communication is not just through dealer turrets alone, but also from mobile phones as well as via Instant Messaging (IM), email, etc. 

In the EU the need for firms to be able to play back electronic transactions was addressed in MiFID I, in relation to its “best execution” rules in particular.  The UK FSA also introduced a requirement for voice recording.  Recording of voice, IM and email is now being considered for MiFID II, and this area is also addressed by the Dodd-Frank Act.  This is unlikely to be just for the purposes of audit and transaction reporting.  It’s likely to be required in order to prove “best execution” for compliance purposes, and that is more complex than it might at first appear.

TagsTrade executionPost-trade & ops

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job title Consultant
location Waterlooville
member since 2009
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I help organisations that work in the financial sector around the world to understand better how the sector works, how regulations impact the business operations of financial institutions, and how to...

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