India to Require Trade Request Recording

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India to Require Trade Request Recording

September 29, 2017

We put a lot of trust in our financial institutions.

So it’s really disturbing when we learn about fraud committed by companies like Wells Fargo, which created millions of accounts without its clients’ knowledge. Or about guys like Bernie Madoff, whose Ponzi scheme resulted in $50 billion in losses. These are just two of many examples, of course. Just a couple of the examples of financial fraud that have actually come to light.

In recognition that this kind of thing happens, some regulators are moving to implement new requirements for financial advisors and traders to record their interactions.

For example, the European Union recently came out with its MiFID II rules. These rules, which go into effect in a few months, will make recording of mobile conversations related to financial transactions mandatory on both personal- and company-owned devices. MiFiD II also will require organizations to store these interactions for five years. And it covers conversations between both wealth managers and independent financial advisors, and their clients.

Regulators in India have recently made a similar move.

The Securities and Exchange Board of India this week directed stock brokers to keep records of orders placed by clients. This requirement kicks in at the new year. The goal here is to decrease unauthorized trades – or those trades made without the clients’ knowledge.

These records could be in the form of hand written documents signed by client, phone recordings, emails from an authorized ID, logs of internet transactions, records of SMS messages, or other legally verifiable records, SEBI says. But these rules are likely to increase the use of call recording technology to keep reliable data on who agreed on what and when.

Edited by Mandi Nowitz

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