A requirement that financial advisers record their phone conversations with their clients, in an effort to help resolve possible subsequent disputes “in a quick and cost-effective manner”, was among the key recommendations contained in the UK Financial Conduct Authority’s third consultation paper on the implementation of the revised Markets in Financial Instruments Directive (MiFID II), published today.
“We are open to receiving and exploring suggestions on alternative proposals for smaller financial advisers,” the FCA added, with respect to the mandatory phone call-recording idea.
MiFID II, which comes into effect on 3 January 2018, is intended to update and improve the regulatory framework which governs the way many of the EU’s financial services sectors do business.
MiFID II is also intended to strengthen the investor protection regime that covers retail and wholesale investment businesses in the EU.
Among some of the other key proposals contained in the FCA’s latest MiFID II consultation paper:
* Strengthen current “inducement and research rules”, in order to “drive better competition and ensure research is only produced and consumed where it adds value to investment decisions”
* Introduce a requirement that all costs and charges be fully disclosed
* Provide guidance to financial services product and services providers on their responsibilities with respect to ensuring “fair treatment of [their] customers”
FCA chief executive Andrew Bailey noted that MiFID II’s goal of strengthening consumer protection aligns with, and advances, our own statutory objectives”.
As a result, he went on, “the changes to [the existing MiFID] rules we are proposing today reflect key themes that we have worked on in both retail and wholesale markets over recent years to promote competition and market integrity.
“As we said in our statement, following the EU referendum result, firms must continue to abide by their obligations under UK law, including those derived from EU law. They must continue with implementation plans for legislation that is still to come into effect, of which MiFID II is one such example.”
The third consultation is open until 4 January 2017, except for comments on one portion of the document, which the FCA said should reachit by 31 October.
A fourth consultation paper is likely to be published towards the end of this year, the FCA said.
To see and download the latest consultation, click here.