This article was written by Natalie Lim.
In its 20 March public statement, ESMA recognises that, considering the exceptional circumstances resulting from the Covid-19 outbreak and despite steps taken by firms, there may be scenarios where the recording of relevant conversations required by MiFID impracticable. If firms are unable to record voice communications under such exceptional circumstances, ESMA expects them to consider what alternative steps they could take to mitigate the risks related to the lack of recording. Moreover, firms are expected to deploy all possible efforts to ensure that these measures remain temporary and that the recording of telephone conversations is restored as soon as possible.
In a related press release of 20 March 2020, ESMA explains that it will continue to monitor developments in financial markets in coordination with national competent authorities (i.e. the FCA in the UK), including the application of relevant EU requirements by market participants, as a result of the Covid-19 situation. ESMA has stated that it is prepared to use its powers to ensure financial stability, orderly functioning of EU markets and investor protection
The FCA’s telephone taping and electronic communication recording rules that derive from the MiFID II Directive (2014/65/EU) are set out in SYSC 10A.