In an appearance before the European Parliament earlier today, the Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, has called on national regulators within the EU to investigate the use of new financial services messaging platform Symphony.
Symphony's own website had long stated that its system "guarantees that data deletion is permanent", while promising that use of Symphony will help address the risk of "billions of dollars of fines".
Symphony’s investors include search-engine giant Google, together with Goldman Sachs, Bank of America, Credit Suisse, Natixis, Société Générale, Deutsche Bank, HSBC, Morgan Stanley and JPMorgan.
Anneliese Dodds, Labour MEP for the South East of England, today challenged Mr Maijoor over whether more needed to be done to prevent the use of this software to get around financial regulations. In response, the ESMA Chair reiterated that there are clear obligations for record keeping and that he would be talking to National Competent Authorities about their responsibilities in this area.
Anneliese Dodds MEP welcomed the response saying: “The Chair of ESMA has today clarified that new platforms like Symphony must comply with EU laws, which demand that traders and banks keep a record of their communications. This is absolutely right as it was through those kinds of records that regulators were able to catch those bankers fixing rates like LIBOR. It is encouraging that ESMA will therefore be pushing national regulators to make sure that these rules are enforced.
“The implications of these messaging services could affect all kinds of financial activity, not just rate fixing. Without action and enforcement, European consumers risk becoming victims of a second Libor scandal, at the hands of a group of banks who appear to have learnt nothing,” the MEP concluded.