The FSA has released a paper for consultation which will see the removal of exemptions currently placed on the recording of mobile phone conversations in order to tackle market abuse.
The FSA’s proposal would mean that around 16,000 mobiles would have to be recorded which would cost firms around £11m for set up and on-going costs of around £18m.
These average costs were determined as follows:
1. One-off costs were made up of “the purchase of software/ hardware, telecommunication system design and installation to record, store and retrieve taped records.” According to the firms who were surveyed, the average cost per line is quoted as £700.
2. On-going costs consist of maintaining recording equipment, storage and retrieval. The average cost per line is quoted as around £1,200 per year.
Around 60% of firms which were surveyed for this consultation said that if the exemption was removed, they would ban the use of mobile phones for business/ trading purposes as a cheaper option, a rather short-sighted and backward step in my opinion, particularly when the costs can be lower than those quoted.
Feedback on the proposed measures is invited by the 14th June and the FSA then plan to release a policy statement for the fourth quarter.
