Financial companies have long since had to record all phone calls from landlines, but new regulations from the Financial Services Authority (FSA) could see call recording used for mobile phone calls – and then stored for six months.
From March 2009, firms have had to record all telephone conversations and electronic communications relating to client orders and the conclusion of transactions in the equity, bond, and derivatives markets.
By law financial companies have to record email conversations and phone calls from fixed lines however, mobile phone calls were previously exempt from this regulation as the technology simply couldn’t handle it. Now, the technology is well able to record mobile calls. The FSA is currently holding a consultation before deciding to include mobile calls into the rules.
The FSA consulted on the taping rules last year, with them completing a further review of the cost-benefit analysis and discussing with the industry the scope and practicalities of the possibility of recording on mobile devices, both corporate liable and personal devices.
It is expected that recording mobile conversations will become mandatory to close a potential loophole in the FSA’s current taping framework. The FSA believe that if they were to keep the mobile phone taping exemption, those wishing to circumvent the rules have incentives to move ‘relevant conversations’ on recorded fixed lines to unrecorded mobile phones.
This undermines the taping regime’s effectiveness. Therefore, removing the exemption, it is believed, will contribute to achieving the economic benefits as follows: recorded communication increases the probability of successful enforcement; and this reduces the expected value of exploiting private information and hence reduces insider trading.
This, in principle, leads to increased market confidence and greater price efficiency.
The latest reports on this subject for the FSA found that the overwhelming majority of firms in the financial services sector did not employ mobile recording solutions. In the period since the exemption was created, most firms had done little to prepare for mobile recording, preferring to wait until the FSA requires recording from mobiles before implementing a solution.
However, several authorised firms and suppliers have indicated that the level of interest in mobile call recording is now much greater than ever before in the financial services sector. Several authorised firms have requested detailed pricing and technical proposals from suppliers and have discussed in detail how…