FSA’s MiFID March 09 Deadline – Advice Offered

As the clock ticks towards the FSA’s March 6th 2009 deadline to record electronic communications, Open-Tec, developer of the Cstore Information Repository solution for mobile voice and SMS recording and storage, offers advice to all those affected.

The Market in Financial Instruments Directive (MiFID) will impact everyone providing investment advice or transaction services, from investment banks, portfolio managers, stockbrokers and broker dealers, their clients and anyone providing market information such as exchanges and market data providers.

MiFID states that a firm must take reasonable steps to retain all records made by it for a period of at least six months and in a medium that permits the FSA to access the records readily. Where corrections or amendments are required to such records then the situation prior to these changes should also be easily ascertained from the records – i.e., an audit trail needs to be maintained of the changes made. This new requirement will help firms to deter market abuse if staff know that their conversations are going to be recorded. Mobile conversations have been made exempt from this regulation at present, this will be reviewed mid to late 2009. However it is expected that this will be included as the current typical solution, which is to ban use of mobile phones, is impractical.

Alan Stewart, Director of Open-Tec, explains: “MiFID puts IT departments within financial organisations under yet more pressure to provide the right solution to the business. Historically IT suppliers have not been able to provide a single solution that solves all of these regulatory requirements and also protects against future changes. However with the introduction of Cstore™ from Open-Tec, combined with Obsidian Wireless’s Mobile voice and SMS recording solution, everything required by the regulators and the business is easily achievable, affordable and seamless.”

Interestingly and perhaps in part due to the recent issues within the Financial industry, the use of videoconferencing has significantly increased. Furthermore, Video Conferences between the trading organisation and the client is now covered by the new rules on taping. With this in mind, Open-Tec have also partnered with award-winning videoconferencing network provider, vc-net to offer a unique proposition in the market for the recording and storing of all mobile voice, SMS and videoconferencing information.

Open-Tec’s solution offers organisations a repository or archive system that can take in all these different content feeds and store the data in a secure manner that allows the appropriate retention policies to be applied. It can index all the data to enable easy search and retrieval of the relevant information when it is needed. An additional and important piece of functionality is the ability to perform an electronic discovery on the data as it may well be required to be presented in a court proceeding. This then makes evidential weight important; an excellent measure of this is the code of practice from BSI, namely BSI BIP 0008, which is specifically written as a best practice to maximise the evidential weight of electronic data.

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