The requirement for asset managers to record phone calls under MiFID II has left German group Berenberg in the bad books of Stuttgart's local restaurant community.
Gebhardt said that while the German group had worked hard to ensure compliance ahead of MiFID II’s implementation in January, the need to ‘take reasonable steps to record calls’ in the name of full transparency had caused a unique headache.
‘This is one of the requirements and we must comply,’ Gebhardt said. ‘But our Stuttgart sub-office had to have the system retrofitted and to do it properly we needed to have fibre optic cable laid in the street outside the office.
‘Now, this in itself is a challenge as we have to do it outside on the street and the restaurants nearby have opposed the move. They blocked some of the work due to worries about how the noise and disruption will impact business. It is a real unexpected challenge.’
Berenberg's office is located on Bolzstrasse in Stuttgart, which is home to several restaurants, including some specialising in German and Italian cuisine, as well as a steak house and a sandwich shop.
A spokesperson for Berenberg confirmed that the dispute was adequately resolved.
Gebhardt said Berenberg had made good strides towards compliance but acknowledged the criticism levelled at the requirements by groups such as the German Association of Banks.
‘There is still a big challenge around research payments, for example. When we talk about things such as the phone recordings though, there are questions around trust and what benefit that actually brings to investors. If you can see a benefit then of course we should do that, but questions remain.’