On March 3, the UK Financial Services Authority (FSA) published new rules requiring firms to record telephone conversations and other electronic communications. The FSA’s stated purpose for introducing these requirements is the deterrence and detection of market abuse.
The rules, which will be effective from March 2009, will require FSA authorized firms to record all telephone conversations and electronic communications relating to client orders and the conclusion of transactions in the equity, bond, and derivatives markets. There are certain exemptions for discretionary investment managers and for electronic communications with firms that are subject to the FSA’s taping rules.
The required retention period for recorded phone calls and electronic communications is 6 months.
When the FSA first consulted on taping rules in 2007 the proposed required retention period was 3 years and it was proposed to require mobile phone (cellphone) conversations to be recorded. Mobile phone conversations have been exempted from the taping rules, subject to review in 18 months’ time.