FSA proposes taping trader conversations to curb market abuse

22 March 2010

The Financial Services Authority (FSA) has unveiled proposals requiring financial firms to record conversations on trader mobile phones as part of a bid to stop insider dealing.

According to the regulator, new rules will require firms to monitor conversations undertaken on communication devices issued for business purposes.

Businesses will also need to take “reasonable steps” to ensure that communications take place on company devices rather than personal handsets which cannot be monitored for privacy rules.

The changes follow up legislation implemented in March 2009 which required companies to record relevant conversations and keep the data for six months.

Mobile devices were excluded from this rule, the FSA explained.

In its report the regulator said: “[With] the exemption in place, individuals can currently divert fixed line traffic onto an un-taped mobile line. By removing the scope to circumvent the rules, we would enhance our market monitoring and enforcement functions.”

The FSA added that introducing the new rule will provide it with another form of “electronic communication evidence”.

Responses to the paper are being accepted by the body until June 14th.

By Jim Ottewill

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