London, March 19: Banks and other financial companies should tape traders’ mobile phone conversations as part of a crackdown on insider dealing, Britain’s financial regulator said on Thursday.
The Financial Services Authority said it wants firms to tape all “relevant communications” carried out by staff on company-issued cellphones or other mobile handheld electronic communication devices.
The move would cover about 16,000 phones and would cost the industry about 11 million pounds ($16.8 million) to set up, and about 18 million pounds a year to maintain, the FSA estimated in a consultation paper.
The FSA has required firms to record conversations on fixed-line telephones for the last year. Mobile phones had been excluded, but the regulator said technology had advanced enough to include them and remove a loophole in the rules.
The proposals cover voice conversations and other electronic communications that involve the receipt of client orders and negotiating, agreeing and arranging transactions in the equity, bond and financial and commodity derivatives markets, the consultation paper said.
Firms should take “reasonable steps” to ensure bankers and traders do not carry out such communication on private phones, which cannot be recorded for privacy reasons.
—-Agencies