Eoghan Murphy (Dublin South East, Fine Gael)
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218. To ask the Minister for Finance if he has considered a proposal (details supplied) regarding voice recording legislation in the financial services sector; and if he will make a statement on the matter. [39729/13]

Michael Noonan (Limerick City, Fine Gael)
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The issue of telephone recording by financial service providers, including its application to mobile telephony, is dealt with through EU legislation. Under the current MiFID ('MiFID I'), there is Member State discretion in relation to imposing a mandatory obligation on investment firms to record telephone conversations relating to client orders. Under the transposing MiFID Regulations (Statutory Instrument 663 of 2007) the Central Bank may, following consultation, 'imposeadditional obligations on investment firms relating to the recording of telephone conversations or electronic communications involving client orders'. The Deputy should be aware of current EU legislative developments in relation to this issue, as, without prejudice to the current powers of the Central Bank, these will determine the shape of any future legislation in this area. In this regard, the issue of telephone recordings featured in the discussions under the Irish Presidency on the Markets in Financial Instruments Directive ('MiFID II') and the Market Abuse Regulation (MAR).

The Irish Presidency secured a Council agreement in MiFID II and an agreement between Council and European Parliament in relation to the MAR. The provisions in relation to telephone recording by investment firms and other financial services providers were strengthened in both files. In relation to MiFID II, the Council text obliges investment firms to record telephone conversations and electronic communications relating to client orders and when dealing on own account, and to take all reasonable steps to prevent an employee or contractor from using privately-owned equipment which the investment firm is unable to record or copy. In relation to market abuse, which I understand is both the main focus of the Deputy's question and primary driver of the UK legislative changes referred to, the MAR agreement ensures that the competent authorities can require the handing over of existing recordings of telephone conversations, electronic communications or other data traffic records held by investment firms, credit institutions or other financial institutions.

The transposition or implementation date for the MAR has not yet been determined as a technical alignment MiFID II will be required when the negotiations between the Council and the European Parliament have concluded on that file. At that point, there will be certainty as to the obligations and discretions of Member States on this issue.

Following the adoption of both MiFID II and MAR my Department and the Central Bank, as the competent authority, will be in a position to best determine the precise legislative amendments that are required, or where Member State discretion is allowed for, are most appropriate.