RegulationMar 31 2017

FCA scraps adviser phone recording requirement

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FCA scraps adviser phone recording requirement

The Financial Conduct Authority has rowed back on its plans to force financial advisers to tape their phone conversations.

Following a consultation it has agreed the business model of many financial adviser firms means this would “not always be appropriate”.

Instead, the FCA will allow financial advisers to either tape all relevant phone conversations or take a written note of those conversations.

In September the FCA published its latest consultation on Mifid II, an EU directive which comes into effect in January 2018.

The regulator has had a taping policy in place since 2009 which does not include advisers.

But it had reviewed this as part of its work to introduce the new European rules and had proposed extending it to advisers – a move which provoked controversy.

Today the FCA also published “near final rules” on the implementation of Mifid II.

These include changes to the trading of financial instruments including issues affecting trading venues, transparency of trading and algorithmic and high frequency trading.

Firms impacted by the changes to the activities and instruments covered by Mifid II have been told to apply for authorisation or for variations of permission now, or risk being unable to operate in the UK after 3 January 2018.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “Mifid II introduces substantial and wide ranging measures designed to improve investor protection and promote market integrity.

“Some firms will need to be authorised for the first time, others will need to vary their current permissions.

“It is critical that those firms submit their applications now. The FCA does not expect to make any significant changes to these rules before they are finalised in June this year, and therefore firms should not delay.”

damian.fantato@ft.com