UK financial institutions have to record and store telephone conversations and electronic communications relating to client orders under FSA regulations

Introduced by the Financial Services Authority (FSA)

From March 2009, firms involving client orders for the equity, bond and derivatives markets have to retain these files for six months. Electronic communication includes e-mail, instant messaging and faxes. The FSA regulations have been introduced in line with an EU review and are part of the FSA's efforts to combat market abuse, particularly insider dealing and market manipulation.

FSA compliance is the responsibility of the financial institution and does not simply relate to an FSA compliant product but to the entire process used within the institution. The institution is required to have policies and practices in place that ensure they, their staff and any supply agencies carry out their responsibilities to meet these requirements. inCloudOne is able to act for the customer in delivering the call recording features and capabilities but our customers determine the rules under which we may manage it for them. The legislation proposes using Call Recording as a tool within the company policy framework.

The original FSA rules took effect on March 2009 for companies who are undertaking the following activities:  

• Receiving client orders
• Executing client orders
• Arranging for client orders to be executed
• Carrying out transactions on behalf of the firm or another person in the firm's group and which are part of the firm's trading activities or the trading activities of another person in the firm's group
• Executing orders that result from decisions by the firm to deal on behalf of its client
• Placing orders with other entities for execution that result from decisions by the firm to deal on behalf of a client.

For those firms affected, there was a transitional period of one year to give firms enough time to prepare and implement the necessary system changes.

Removal of Mobile Phone Exemption

From November 2011, the exemption of mobile phones is removed from the FSA Business Sourcebook (Recording of Telephone Conversations and Electronic Communications (No 2) Instrument 2010). This means that conversations both voice and text on mobile phones must be recorded in many areas of business within the financial sector.

FSA Regulations

The FSA regulations are in line with an EU review, including the addition of SMS logging and Voice recording requirements, under the Markets in Financial Instruments Directive (MiFID).

Call Recording and SMS Logging

The introduction of the taping programme is part of the FSA's efforts to combat market abuse, particularly insider dealing and market manipulation, a key priority for the FSA.

The voice recording rule is being extended so firms record and keep copies of all relevant voice and SMS conversations made on mobile phones provided to individuals by firms. In addition to the regulatory requirements, there are associated governance issues for firms to ensure Mobile Compliance offers a simple and elegant solution to meet these requirements.

Solutions

FSA Voice Compliant Recording Solutions is now available on inCloudOne phone systems, Landlines and Mobiles. Suitable for any size business and ideally suited to remote workforces and including serviced offices, call our Freephone number to find out more request a call back on our website.

FSA Policy Statement PS08/1 - March 2008 - Telephone Recording: recording of voice conversations and electronic communications

FSA Consultation Paper CS10/7 - March 2010 - Taping: Removing the mobile phone exemption

FSA Policy Statement PS10/17 - November 2010 - Taping of mobile phones