AIMA Article: The MiFID II financial regulations come into force in just a few months. Just like tier-one banks, AIMA members remain confused and challenged about complying.
The changes introduce a raft of new rules but amongst the most onerous are new requirements that all text, IM, social media, email and phone calls potentially relating to financial transactions must be recorded and logged. To be sure this is subjective and the only risk free solution is to record everything. Anything less means unacceptable risk of big fines and even personal prosecution.
Capturing emails is one thing, but few banks or hedge funds are geared up to record all comms and to add to the burden; regulations not only affects businesses based in Europe, but also those doing business here.
To be prudent then, any firm trading with an EU partner, or even another outpost of their own firm, should record & store all communications.
The impact of BYOD and employees using banned consumer apps like We Chat and WhatsApp for doing business are also profound. Voice calls VoIP services like on WhatsApp cannot be recorded technically or perhaps legally under imminent data protection laws like GDPR.
Moreover, ephemeral messaging apps like Snapchat leave no permanent record of what’s been said, by who, to whom, so its clear they have to be stamped out with harsh penalties.
When the new regulations come into force, on 3 January 2018, this could prove a compliance bombshell.
As a former regulated money manager, I worried about the looming clash between the demands of the new rules and a world in which people are used to powerful consumer Apps.
To respond to these trends while being compliant isnt simple but banning the use of unauthorised apps is one vital step. The other is to make use of OTT enterprise technology – deployed on employee’s own and company devices – that logs and records every business communication across all authorised channels to meet the new rules.
Lee C. Stonehouse; Founder of VENNCOMM