By Huw Jones
LONDON (Reuters) - The European Union's markets watchdog has told stock and bond traders working offsite because the coronavirus has shut their trading floors to take notes if they can't record telephone conversations with customers.
Under EU law, traders must record calls when trading. But banks have shut down their main trading floors, forcing dealers to work from back-up sites or even from home, where some may not be equipped to record calls.
Banks have complained they have been left largely in the dark by regulators over how to deal with such situations without falling foul of an EU securities law known as MiFID II.
"ESMA reminds firms of the MiFID II requirements in this area," the European Securities and Markets Authority (ESMA) said in a statement on Friday.
"ESMA also recognizes that, considering the exceptional circumstances created by the COVID-19 outbreak, some scenarios may emerge where, notwithstanding steps taken by the firm, the recording of relevant conversations required by MiFID II may not be practicable."
This could be due to the sudden remote working by a significant part of staff, or the lack of access by clients to electronic communication tools, ESMA said.
If traders can't record calls then they could use written minutes or notes of telephone conversations when providing services to clients after telling customers there would be no recording and that notes would be taken, ESMA said.
"In these scenarios, firms should also ensure enhanced monitoring and ex-post review of relevant orders and transactions," the watchdog added.