The Financial Conduct Authority (FCA) has decided to automatically delete all emails after a year of receiving them unless they are considered important enough to be saved in data repositories, according to a Financial Times report.
Reducing Legal and Reputational Risk
A notice on the British regulator’s intranet page highlighted that the email deletion effort would start on 1 April and is aimed at reducing “the legal and reputational risk.” However, it will only delete emails received and sent after 1 April 2025, leaving those from before intact.
“Any emails that should be retained to comply with regulatory and legal requirements, including the Freedom of Information Act, will be saved,” the regulator noted in a statement sent to the publication, adding that deleting unnecessary emails will enable it “to retrieve information more efficiently.”
The regulator further stressed that it would train its staff on the policy to inform them which emails to keep under the Financial Services and Markets Act. Additionally, all information generated or received while carrying out regulatory duties must be kept for 25 years.
Impact on Probes into FCA’s Actions
Despite the assurances, the regulatory decision has raised concerns among staff and campaigners about the regulator’s accountability in scenarios that might arise after a year.
Additionally, there is the question of how the financial market watchdog’s staff would categorise important emails, creating a significant risk of failing to store crucial communications.
Furthermore, there are internal concerns about how the changes would impact responses to Freedom of Information Act requests.
Interestingly, the FCA mandates licensed investment firms to keep all email communications on record for a minimum of five years, while pension transfer specialists must keep them indefinitely. Other firms must also retain their emails for at least three years.
The FCA oversees all financial services firms within the UK and also takes enforcement action in cases of non-compliance. Recently, it fined a CFDs broker, Infinox, for failures in transaction reporting, marking its first enforcement action under the UK Markets in Financial Instruments Regulation (MiFIR).
Meanwhile, the regulator is considering easing some of the Consumer Duty rules, which have significantly increased compliance costs for UK financial firms.
This article was written by Arnab Shome at www.financemagnates.com.
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