The Financial Regulator has decided to postpone the introduction of obligations to record telephone calls and electronic communications under the European Communities (Markets in Financial Instruments) Regulations 2007.

This follows the decision by the Committee of European Securities Regulators (CESR) to consider the introduction of new unified regulations on telephone recordings and electronic communications. The Financial Regulator will review the decision to postpone the introduction of obligations when CESR has clarified its position in this matter.

In September 2009, the Financial Regulator published a Consultation Paper in which it sought views on the introduction of obligations relating to the recording of telephone conversations and electronic communications involving client orders under Regulation 40(6) of the MiFID Regulations. Under the MiFID Regulations, there are currently no requirements on MiFID firms to record telephone lines. As part of the Consultation Paper, the Financial Regulator had proposed that, from 1 May 2010, MiFID firms should record all telephone calls (including mobile phones) and electronic communications involving client orders and maintain the recordings for a period of at least two years and until the record is no longer of any relevance to any complaint, disciplinary action or investigation.

CESR’s role is to improve co-ordination between securities regulators, to act as an advisory group to assist the EU Commission and to work to ensure more consistent and timely day-to-day implementation of Community legislation in the Member States. The Financial Regulator is a member of CESR and will be involved in the MiFID Review.