December 12, 2017 An overhauled version of the European Union’s Markets in Financial Instruments Directive—known as MiFID II by EU professionals—is set to take effect on January 3, 2018. The new directive is designed to offer greater protection for European investors by requiring that EU banks and other financial services organizations provide more transparency into all asset classes.
“The new rules cover virtually all aspects of trading within the EU,” reports the Financial Times™. “They reach across the financial services industry, from banks to institutional investors, exchanges, brokers, hedge funds and high-frequency traders.”
One of the most demanding components of MiFID II is that financial organizations must record all “communications that are intended to lead to a transaction”—a significant change in scope from the previous standard of simply “client orders and transactions.” Data must be retained for five years and firms must conduct surveillance on their employees’ communications. This new standard significantly expands the scope of communications that must be collected, retained and monitored.
MiFID II mandates that technology be used to automate the process of data collection and retention. It specifically requires that business communications be harvested and monitored from telephones, email systems, mobile devices, text messaging services, social media platforms and other relevant communications channels used by professionals.
How serious are the implications for EU banks and other financial services organizations? A survey by UK-based consulting firm JWG Group Ltd. found that 90 percent of buy-side firms believe they are at either high or medium risk of not being compliant with the rules.
It’s essential to have the right technology tools at your disposal in order to deploy the best information systems for MiFID II compliance. For example, AccessData’s AD eDiscovery® helps EU financial services organizations mitigate risk, ensure compliance and improve response efficiency. The software is a single, fully integrated platform for forensically sound enterprise-wide data preservation, search, collection, processing, data assessment and review. This gives corporate teams a simple platform for managing data compliance.
With just weeks to go before the start date to comply with these new requirements, more than half of the EU’s 28 countries are still scrambling to put MiFID II financial-market rules on their books, according to Bloomberg News. It’s essential to identify and deploy a proven data collection and retention software platform in order to ensure compliance with MiFID II. For more information, please feel free to contact me at [email protected].
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About the Author
Patrick Looney is European sales director for AccessData, based in the UK. Looney advises clients on how to deal with large or regular data collections, filtering and analysis, complex digital forensic investigations and e-discovery projects. For more information, please go to www.accessdata.com.