The European Commission has dropped plans to introduce reforms which could have required investment firms tape every telephone conversation with clients.
Industry officials say it was feared intermediaries, distributors and investment companies would essentially have to record every telephone conversation with clients in case the discussion at any point shifted to their investment products already held, and potential changes they might request.
Taping telephone calls would have been required under the Markets in Financial Instruments Directive, in relation to a company’s arrangements for recording the ordering of investment products or financial instruments.
Sources at the Treasury deny the requirement to record “orders for financial instruments” would have affected investment advice as it only related to the ordering of financial instruments, but this onerous requirement has now been dropped anyway under the latest round of revised proposals for MiFID.
It had previously been included in one of four documents concerning MiFID – Working document ESC/7/2005 on “methods and arrangements for reporting transactions in financial instruments”.
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