×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

UK bank mobile phone rule may come in next year

UK bank mobile phone rule may come in next year
Comment E-mail Print Share
First Published: Thu, Apr 22 2010. 07 34 PM IST
Updated: Thu, Apr 22 2010. 07 34 PM IST
London: Financial firms could be forced to tape deals transacted over a mobile phone from late next year but the measure may depend on other countries following suit to avoid loopholes, Britain’s market watchdog said on Thursday.
European Union states have different regimes for handling dealer conversations which could make it easy for abuse to take place in a less regulated country. The United States does not require taping.
“There is potential for gaming,” Stephen Hanks, a policy manager at the Financial Services Authority said.
“The European Union is now looking at harmonising the rules,” he told reporters at a roundtable organised by Research in Motion.
Jocelyn McCafferty of the FSA investments policy unit said it was unlikely any future EU decision would force the watchdog to alter its plans.
The watchdog 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.
Hanks said the FSA would be looking for evidence that firms were trying to complete some deals outside Britain. Sanctions for breach of the proposed rule would range from public censure to a fine of an individual or firm.
The FSA said in March it wants to tape all “relevant communications” carried out by staff on company-issued cellphones or other mobile handheld electronic communication devices.
Roger Tym of Lovells lawfirm said the measure raised territorial issues such as when a UK registered trader is abroad when concluding a transaction with a client over a mobile phone.
“There are benefits such as making traders more mobile, having a better trail to fight claims from clients, and it would discourage employees from abusing a company phone,” Tym said.
Hanks said some investment banks have already banned the use of mobile phones on trading floors and it was not clear if this ban would be lifted if the new rule is introduced.
The widening of the telephone recording rule to include mobile calls would cover about 16,000 phones and would cost the industry about £11 million to set up, and about £18 million a year to maintain, the FSA has estimated.
Records of the conversations taped from fixed and mobile calls would have to be kept for six months.
The FSA’s latest insider dealing cases date back several years but Hanks said that typically abuse is spotted in time to allow tapes of conversations to be seized early on in a probe.
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, the FSA has said.
Comment E-mail Print Share
First Published: Thu, Apr 22 2010. 07 34 PM IST