Under Article 16(7) of MiFID II, competent authorities may request that a firm keeps the records for up to a period of seven years, rather than five years. In such cases, what are the expectations by competent authorities on the retention of records?

Answer 4

Firms are required to keep records produced under Article 16(7) of MiFID II for five years, with the extension to seven years, if requested by the competent authority. For example, extensions may occur when a competent authority undertakes complicated regulatory investigations in the course of exercising its supervisory powers. This can also occur, for instance, when the competent authority is conducting an investigation on an issue dating several years prior to the start of the inquiry. If a competent authority has not made a request to a firm to put aside recordings within five years from the beginning of the retention period, the firm does not have to keep those recordings for longer than five years from when the record was created. However, if within five years from when the record was created, a competent authority asks firms to retain the recordings, recordings should stop being deleted and should be retained until the competent authority needs them or the competent authority indicates that the recordings are no longer of interest.