The financial services industry has heard the name Dodd-Frank bounced around a lot. However, not many understand what the Dodd-Frank Act actually is and how it particularly impacts business communications. If you run a finance company, this information is essential to the legal and appropriate functioning of your business.
Dodd-Frank Act: What is it?
In 2010, the then President, Obama signed a comprehensive set of financial restrictions and regulations into federal law. Called the Dodd-Frank Wall Street Reform and Consumer Protection Act, this Act evolved as a direct response to the Financial Crisis of 2007 when many big names collapsed due to significant financial landslides. The Act, therefore, works towards encouraging financial stability and avoiding another financial crisis. And it does so through a series of measures:
- Increasing transparency
- Ending the “too big to fail” attitude
- Protecting consumers from problematic financial advice
- Protecting taxpayers by ending bailouts.
Interestingly, the Act’s rules and implications work quite similarly to the MiFID II Act announced by the European Union in 2018. The Markets in Financial Instruments Directive (MiFID) was initiated in 2004. MiFID II, the latest version, aims to strengthen investor protection and make financial markets more transparent and efficient. And the Dodd-Frank Act works towards the same goal.
Call Recording Compliance Under the Dodd-Frank Act
For this extensive list, regulations relating to voice recording are the most important and most difficult rules to adhere to. The motive behind the Act’s voice recording regulations is to encourage record-keeping and increase accountability and transparency. And these regulations apply to almost every organization within the financial services industry. Key call recording requirements state that:
- Communications regarding trade information must be recorded across all channels: telephone, voicemail, text messages, email, etc.
- Records must be organized efficiently for easy searching.
- Files must be stored for the duration of the transaction and for up to five years after.
- Records must be time stamped.
Swaps and Call Recording
Additionally, this Act legislates and regulates the monitoring of the swaps marketplace. Now, what are swaps? A swap is a derivative contract or future, involving the exchange of liabilities or cash flows between two financial institutions. Such contracts usually occur over the phone and have so far been unregulated. In 2012, the Commodity Futures Trading Commission (CFTC) required future brokers to record phone conversations. And so, the Dodd-Frank Act aims to bring transparency to these financial transactions. Firms receiving more than $5 million through swap or futures must store the information for five years, even after the termination of the swap. Furthermore, these records must be accessible and tagged for easy search.
Call Recording Compliance
Whether your business falls under financial services or not, it is a good idea to comply with the regulations of this Act. However, it is difficult to determine which calls are going to lead to a transaction. So, how do you decide which calls to record or not? One solution is to record all calls. But the cost of recording calls and storing them can be expensive. This is because traditional call recording technology works with hardware. And that can generate higher costs as well as limited access to data. Additionally, you will need storage space upgrades.
Fortunately, cloud-based solutions exist to make call recording and storing processes easier. By choosing a virtual provider, like United World Telecom, you can set 100% of your calls to be recorded. And then access them with ease without needing to store them “physically.” You can get call recording with your virtual business number, which eliminates the need for equipment costs, etc.
Closing: Get Call Recording with United World Telecom
You can take advantage of our Call Recording feature to record and store incoming and outgoing calls. Stored as MP3 files, you may access these recordings easily, as they are accessible through our control panel. Sign up for a business number today or call us to find out more.