Record keeping under MiFID and the FSA's proposals on telephone recording: Widening the horizon?

The Markets in Financial Instruments Directive (MiFID) will result in extensive changes to the regulations applicable to financial services firms in Europe. One area in which changes have been made is the keeping of records -- but how extensive are those changes? An analysis of the MiFID rules and the comments emanating from the Commission of European Securities Regulators (CESR) demonstrates that, in addition to a wide range of explicit record-keeping requirements, firms are also specifically obliged to keep any records that enable the authorities to monitor regulatory compliance and this patently encompasses a very broad range of records. This theme, whereby the regulated community is obliged to provide to the regulator tools designed to assist the regulator to monitor compliance, can also be seen in the Financial Services Authority (FSA) consultation paper on the recording of telephone conversations for the purposes of combating market abuse. Consequently, regulated firms must, more than ever, look beyond specific record-keeping requirements and ensure that they are able -- at all times and in all respects -- to produce the records necessary to demonstrate compliance with the myriad regulations to which they are subject. [ABSTRACT FROM AUTHOR]