With less than a month to go before the upcoming MiFID II legislation comes into force on 3rd January 2018, latest research has found that a shocking 39% of UK financial organisations are unaware whether their organisation is compliant or not. A quarter confirmed that they are not yet compliant with recording technology and 29% are still going through the compliance process - despite the fact that companies can be fined up to 5 million euros or 10% of annual turnover for non-compliance.
The new research by Timico also found that just 8% of companies said that employees were fully aware of the legal implications of MiFID II and had received training on the processes required to be compliant.
The Markets in Financial Instruments Directive (MiFID II) is EU legislation that regulates firms who provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collective investment schemes and derivatives), and the venues where those instruments are traded. Recital 57 of the Directive states that “…firms will be obliged to record all communications that are intended to result in a transaction. Regardless of the original source, whether on a mobile phone, legacy call recording system, cloud based solution or a newly installed recording system, recordings must be stored for at least five years…”
Staff in the dark on compliance and penalties
The study also found that 14% of staff were unaware of what processes are required to be compliant, 37% are in the process of initiating a training programme and a worrying 41% did not know if staff were aware of the legal requirements of MifiD II or had received any training on the legislation.
Kevin Linsell, Chief Technology Officer at Timico, said: “With just under a month to go and Christmas holidays in between, it’s clear that many businesses are massively unprepared for MiFID II, despite having had the last 12 months to prepare for the impending legislation.
“It’s imperative that companies get ready and fast, with robust, compliant recording technology in place and employees fully trained and up to speed on the new requirements if companies are going to avoid potentially incurring huge financial penalties.”
Lack of mobile compliance and firms oblivious to BYOD policies
Of those polled, over a third (35%) were unaware if there was a BYOD (bring your own device) compliance strategy in place in preparation for the looming MiFID II deadline, while 12% stated that there was no policy in place to adhere to the new requirements.
42% of businesses said that they do not have a mobile compliant platform in place to record calls. Adds Kevin: “The fact that nearly half of UK financial organisations that we have surveyed currently have no mobile compliance platform in place is highly concerning.
“We know from our own financial clients that a large section of the workforce conduct business on mobiles, as teams are constantly travelling between markets and working remotely. It is essential companies get compliant systems in place for not only mobiles, but across all communication platforms to ensure they meet the January deadline.”
(Source: Timico)
