In May 2007, the FSA published Consultation Paper 07/9: Conduct of Business regime: non-MiFID deferred matters (including proposals for telephone recording) (CP07/9). In Chapter 19 of CP07/9, the FSA set out proposals to require firms to record certain telephone lines and to keep certain electronic communications. The FSA proposed that firms should keep the recordings and records for three years in a form that the FSA could readily access.
In Policy Statement 07/18: Conduct of Business regime, the FSA stated that it had decided to conduct additional work in this area before deciding on its final rules. The FSA’s additional work consisted of:
- Reviewing its cost benefit analysis in an effort to refine its estimates of costs.
- Engaging with firms and trade associations to consider points made about the scope and practicalities of the proposals.
- Looking at any proposals for an industry initiative to address the market abuse concerns that the FSA needs to tackle. The FSA has now completed its additional work and has published Policy Statement 08/1: Telephone recording: recording of voice conversations and electronic communications (PS08/1). In PS08/1 the FSA gives feedback on its additional work and sets out its final policy decisions and rules. The FSA has made significant changes to the proposals that were set out in CP07/9 and these include:
- The retention period for records will be six months.
- Discretionary investment managers will not be required to record telephone conversations and electronic communications with firms that are subject to the taping rules.
- Mobile phone conversations have been exempted from the taping rules.
The FSA’s rules will not come into force until March 2009.
View Policy Statement 08/1: Telephone recording: recording of voice conversations and electronic communications, 3 March 2008