FSA to tap trader mobile calls

15 November 2010

Phone calls made by traders and investment bankers are to be tapped as part of a bid to reduce insider trading, the Financial Services Authority (FSA) has announced.

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 £11 million.

“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.”

Financial firms will be required to take “reasonable steps” 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

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