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)