December 10, 2012 @ 4:33 PM

The Impact of FSA Mobile Phone Requirements

By Gregory J. Robb, Research Assistant, Applied Business Technologies, LLC

“The only constant is change, continuing change, inevitable change, which is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.” — Isaac Asimov

The Financial Services Authority’s (FSA) Conduct of Business sourcebook (COBS) now requires that financial firms based in the United Kingdom must record relevant transaction conversations communicated from mobile phones. Talk about the ultimate format change, from taping transactions to recording wireless electronics. The FSA regulation is aimed at curbing market abuse, but its application is a New World challenge for business.

The Background

Oh, how one little clause stirs the financial services world. As of March 6, 2009, the Financial Services Authority amended its Conduct of Business sourcebook (COBS) for transaction recording by companies based in the United Kingdom. Section 11.8.5 states that, “A firm must take reasonable steps to record relevant telephone conversations, and keep a copy of relevant electronic communications….” The next section, 11.8.6(1), contains a loaded clause. It states that the obligation does not apply to: “telephone conversations and electronic communications (except emails) made with, sent from or received on a mobile telephone or other mobile handheld electronic communication device…”. So, “relevant electronic communications” does not apply to mobile phones?

Business howled and FSA amended its Conduct of Business sourcebook (COBS) again in March 2010. The mobile phone clause has been struck from COBS, which means that the obligation outlined in Section 11.8.5 does apply to financial transactions conducted via mobile phone.

Why the Background Matters

Business leaders work hard to stay ahead of change. In this case, regulators are struggling to make the transition in statutes governing the financial industry. The key to success is to be ready.

The FSA mobile phone recording requirement emphasizes the electronic challenges of modernity. In this case, the challenge is not recording; it is the source of the voice transmission: mobile (wireless) phones. How to record? The solution lies in technological advance in voice-recording solutions. The best solution lies in understanding how to satisfy FSA’s requirement for “…reasonable steps to record relevant telephone conversations, and keep a copy” without breaking the bank itself!

How the Rule Applies

At this writing, industry insiders continue to debate the best means of applying the FSA rule. Do transactions conducted on behalf of private companies still need to comply? Does the FSA rule apply more directly to transactions by public institutions? Does the mobile phone transaction rule require compliance for companies which have since left the UK? As with any new technological evolution, the practical implications of the FSA mobile phone rules play out with time.

However, the reward of implementing voice-call data platform software may outweigh its cost, especially when financial wealth is on the line.

Applied Business Technology (ABT) specializes in customized FSA-compliant voice-recording solutions. ABT solutions streamline the static of a noisy commercial world while ensuring regulatory compliance. When your voice-call recording solution features all-inclusive design, regulatory change is a simple matter of parameter adjustment. Make it so.

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