FSA to tap trader mobile calls despite bank protests over costs

FSA to tap trader mobile calls despite bank protests over costs

The UK's Financial Services Authority is set to make investment banks record and store traders' mobile phone calls despite industry opposition to the move which could cost more than £10,000 a handset a year.

The FSA's new rules - to come into force from November next year - are deigned to prevent insider trading and market abuse.

They mean that firms will have to record and store for six months all "relevant conversations" on company-issued phones as well as take "reasonable steps" to prevent these relevant conversations taking place on private communications equipment.

The decision comes despite respondents - including investment firms, technology vendors and trade associations - to a consultation on the issue expressing doubts that any benefits will outweigh costs.

Analysis from one investment bank indicates that for a population of 50 users the estimated cost would be £500,000 for a one year recording system, with an associated cost of £100,000 for ongoing maintenance.

Another respondent estimates that the cost to their firm alone of recording all BlackBerry phones issued to front office staff would be over £2.6 million a year.

However, the FSA says it stands by its initial cost estimates - based on 16,000 affected handsets - of a one-off charge to the industry of £11 million for installation with annual costs of £18 million.

The watchdog also says the rules are compliant with EU and international privacy laws.

You can read the full FSA statement here:Download the document now 220.8 kb (PDF File)

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