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Telephone Taping

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Published: 15th November 2010 by William Webster

Dealers are human and they do make mistakes. These can come to light quickly or later during the confirmation process. Classic errors include rates, amounts, maturities and even what has been bought or sold.

There will be times when you need to refer to the records to find out exactly what took place. If you run a treasury you will know about the benefits of taping telephone conversations. Mistakes can be expensive and the sooner you can correct them the less chance you or your counterparty has of losing out.

There is of course another reason for recording and that's to help prevent market abuse. According to the regulator recorded conversations can provide useful evidence in investigations.

When you consider this the arguments in favour of recording are overwhelming. If you have any doubts you should refer to the FSA's Policy Statement 10/17 and its annex (10th November 2010). It covers telephone conversations and electronic communications. Recording is mandatory.

In a nutshell the rules are:

  • 11.8.5R "A firm must take reasonable steps to record relevant telephone conversations, and keep a copy of relevant electronic communications, made with, sent from or received on equipment......"
  • 11.8.5A R "A firm must take reasonable steps to prevent an employee or contractor from making, sending or receiving relevant telephone conversations and electronic communications on privately-owned equipment which the firm is unable to record or copy".
  • Recording and storage refers to a period of at least six months.
  • Mobile telephones/devices are now included within these rules.