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FCA Explores Meaning of “Durable Medium” on Website
Saturday, April 22, 2017

On April 7, the UK Financial Conduct Authority (FCA) updated part of its website on the meaning of “durable medium,” aiming to clarify the meaning and intention of the phrase as well as to explain its origin in EU law.

Various EU regulatory provisions require that a firm must provide certain information to a client in writing, either on paper or in another “durable medium.” Many recordkeeping requirements, including under the revised Markets in Financial Instruments Directive (MiFID II), also require firms to store information in a durable medium. Citing the lack of clarity on how innovative and new forms of media could meet the durable medium standard, the FCA states that it will update its handbook definition of the term.

A durable medium must:

  • allow information to be addressed personally to the recipient;
  • enable the recipient to store information in a way that is accessible for future reference and for a period of time adequate for the purposes of the information (storability); and
  • allow the unchanged reproduction of the information stored (reproduction).

The FCA’s website explores how each of these criteria can be applied to mobile and tablet apps, video, interactive and secure websites, emails, PDFs and CD-ROMs and floppy-disks.

The FCA goes on to lay out principles of EU case law which may aid firms in considering whether an unconsidered medium will meet the criteria for a durable medium. Factors drawn from the cases which may help firms include the following:

  • a principal factor underlying the notion of a durable medium is to enhance consumer protection;
  • in the context of new technologies, a substitute for paper form may be regarded as meeting the requirements of consumer protection so long as it fulfils the same functions as paper form;
  • the instrument must allow the recipient to store the information, which, when stored, must be accessible for as long as it is relevant to the recipient in order to protect his or her interests stemming from their relationship with the provider of the information; and
  • there may be several technical methods available for guaranteeing unchanged reproduction. It is for the firm in each case to ensure that the method of electronic communication employed permits this kind of reproduction.

The website is available here.

 

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