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Another sacred cow slaughtered, as financial traders get set to record phone calls
In this traumatic financial era in which we suddenly find ourselves living, yet another sacred cow of city trading will die a painful death in two weeks time when traders who either buy or sell shares, bonds and any other paper will be legally obliged to record not only phone calls but also e-mail "conversations".
The days of "my word is my bond" will be old hat from the 6th of March, when a new set of rules, laid down by the Financial Services Authority (FSA), will come into effect
While many traders and possibly even their clients will feel uncomfortable about this new piece of legistalation, it has obviously been implemented for a reason. And that reason has to be to deter traders from abusing the stock market or behaving in a fraudulent or dishonest manner. Digital tracking has hit the markets and anyone who has tried to lie or waffle their way out of trouble will be unable to do so.
Bodies representing the various traders who earn their living in this high paced World are reported to be less than happy about the new legislations, claiming that "it will do more harm than good".
The FSA appear to be unimpressed with the city trader's complaints and obviously in the light of information which by its very nature would need to remain confidential, have decided that recordings of phone conversations as well as any records of electronic communication must be kept by any registered city trading company. This ruling applies to client orders in the fields of equities, bonds or derivatives, with the electronic communication requiring to be retained including phone calls, emails, faxes and even chats,
"Until now, market abuse has been the most difficult offence to investigate and prosecute." Pointed out a FSA representative "Good quality recordings of voice conversations and of electronic communications will not only help traders, their customers by allowing the FDA to detect and deter any kind of behaviour that may be deemed as inappropriate."
What may also be helping to further wipe the smiles of the faces of city traders is that the cost of implementing these new regulations will need to be borne by them. They also hastened to point out that the cost of storing and retrieving all of these digital interactions will be very high, verging on the astronomical.
Traders who are up in arms regarding the legislation are also hasty to point out the many loop holes that exist in it. Their major complaint is that the UK bond market is the only one to implement such legislation and there is a possibility that competitors will take advantage of the mistrust generated to capture business from their British rivals. Another loophole that some of the more immoral traders may want to take advantage of the regulations cannot cover calls and transactions made through mobile phones or handheld devices.
As the legislation draws close to implementation, one cannot help but wonder what Gordon Gekko would have made of it.
in two weeks time when traders who either buy or sell shares, bonds and any other paper will be legally obliged to record not only phone calls but also e-mail "conversations".
The days of "my word is my bond" will be old hat from the 6th of March, when a new set of rules, laid down by the Financial Services Authority (FSA), will come into effect
While many traders and possibly even their clients will feel uncomfortable about this new piece of legistalation, it has obviously been implemented for a reason. And that reason has to be to deter traders from abusing the stock market or behaving in a fraudulent or dishonest manner. Digital tracking has hit the markets and anyone who has tried to lie or waffle their way out of trouble will be unable to do so.
Bodies representing the various traders who earn their living in this high paced World are reported to be less than happy about the new legislations, claiming that "it will do more harm than good".
The FSA appear to be unimpressed with the city trader's complaints and obviously in the light of information which by its very nature would need to remain confidential, have decided that recordings of phone conversations as well as any records of electronic communication must be kept by any registered city trading company. This ruling applies to client orders in the fields of equities, bonds or derivatives, with the electronic communication requiring to be retained including phone calls, emails, faxes and even chats,
"Until now, market abuse has been the most difficult offence to investigate and prosecute." Pointed out a FSA representative "Good quality recordings of voice conversations and of electronic communications will not only help traders, their customers by allowing the FDA to detect and deter any kind of behaviour that may be deemed as inappropriate."
What may also be helping to further wipe the smiles of the faces of city traders is that the cost of implementing these new regulations will need to be borne by them. They also hastened to point out that the cost of storing and retrieving all of these digital interactions will be very high, verging on the astronomical.
Traders who are up in arms regarding the legislation are also hasty to point out the many loop holes that exist in it. Their major complaint is that the UK bond market is the only one to implement such legislation and there is a possibility that competitors will take advantage of the mistrust generated to capture business from their British rivals. Another loophole that some of the more immoral traders may want to take advantage of the regulations cannot cover calls and transactions made through mobile phones or handheld devices.
As the legislation draws close to implementation, one cannot help but wonder what Gordon Gekko would have made of it.
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