UK banks to tape mobile calls from November 2011
Bankers, hedge fund and investment managers and stockbrokers must have their mobile calls taped from November 2011 to help crack down on market abuses, the financial watchdog said on Thursday.
Fixed line calls involving financial business such as share orders are already taped to help the Financial Services Authority (FSA) in any fraud or market abuse probes.
The FSA announced on Thursday that these rules are now being extended to business calls over a mobile phone and the tapes must be archived for six months.
“Removing the exemption will provide an extra source of voice and electronic communication evidence, which can be used to help us counter the key priority of market abuse and increase the probability of successful enforcement,” the FSA said.
“The new rules will also contribute to our wider effort to promote cleaner markets which should, in turn, enhance market confidence,” it added.
The European Union is also looking to harmonise the taping of mobile calls by financial firm employees when it proposes revisions to its Markets in Financial Instruments Directive (MiFID) early next year.
Firms have complained about extra costs but legal experts say it will make traders more mobile and give them a broader electronic trail to fight disputes with clients.
The FSA has estimated the extension of the taping rule will cover about 16,000 mobile phones and would cost the industry about 11 million pounds to set up and about 18 million pounds to maintain annually.
Banks will have to take reasonable steps to ensure traders don’t use their private phone to carry out transactions as they cannot be recorded for privacy reasons.