UK Financial Conduct Authority (FCA)
The Financial Conduct Authority’s telephone and electronic communication recording rules were derived from the EU Markets in Financial Instruments Directive (Directive 2004/65/EC).
These rules fall under the FCA Senior Management Arrangements, Systems, and Controls (SYSC) framework, specifically SYSC 10. SYSC 10A requires full and accurate records of financial service industry transactions, including telephone conversations, and electronic communications must be retained for at least six months.
The regulations concerning telephone and electronic communication recording to ensure compliance and facilitate effective supervision in the financial industry.
Under the FCA's rules, firms engaged in regulated activities are generally required to record telephone conversations and electronic communications that relate to specified activities. The aim is to enable effective monitoring, detection of market abuse, and dispute resolution. Firms subject to these requirements must have appropriate systems and controls in place to capture, store, and retrieve such communications.
FCA's telephone and electronic communication recording rules include:
Scope: The rules apply to regulated firms engaging in activities such as dealing in investments as principal or agent, arranging deals in investments, managing investments, and providing financial advice.
Record-keeping duration: Firms are generally required to retain records of relevant communications for a minimum of six months, but specific circumstances may warrant longer retention periods (e.g., for dispute resolution).
Communication types: The rules encompass various communication channels, including telephone conversations, emails, instant messages, and any other electronic communications that may result in a transaction or impact the client's order.
Record accessibility: Firms must ensure that records are readily accessible and can be promptly retrieved upon request from the FCA or other regulatory bodies.
Monitoring and quality assurance: Firms should establish monitoring processes to assess compliance with the recording requirements and the quality of recorded communications.
Notification to clients: Firms must inform their clients about the recording of relevant communications and its purposes. Typically, this is done through disclosures in client agreements or terms of business.
For more information see fca.org.uk
