The new regulations are expected to come into force by November 2011 and will be an extension of existing legislation which already requires the recording of conversations made on land lines by bankers.
According to the regulator, up to 16,000 phones are expected to be covered by the additional rules and cost the financial services sector an estimated Â£11 million.
âRemoving 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,â the FSA said.
âThe new rules will also contribute to our wider effort to promote cleaner markets which should, in turn, enhance market confidence.â
Financial firms will be required to take âreasonable stepsâ to ensure that trade conversations do not take place on personal phones and handsets.
The new rules are also fully compliant with privacy laws put in place by the EU.
By Jim Ottewill