Britain to tape traders mobile phones to fight fraud

Companies would also be responsible for discouraging employees from taking client orders or discussing and arranging transactions on their private cell phones,where conversations cannot be recorded.

The new rule makes Britain the only country in Europe to explicitly require the taping of conversations on business cell phones,according to the FSA. Rules in other European countries merely require companies to ensure that all relevant conversations are recorded.

We expect the rules to increase the volume and quality of information available to us to use as additional evidence in insider trading cases, Sarah Bailey,a spokeswoman for the FSA,said.

The FSA is already taping conversations on office land lines and is storing e-mails,but had exempted cell phones until now because the right technology was not available. The rule would affect about 16,000 cell phones issued by firms,which would have to keep the recorded conversations for six months.

The new rule would also require firms to take reasonable steps to ensure that such communications do not take place on private communication equipment that firms cannot record mainly for privacy reasons, the FSA wrote in the policy statement published on Thursday.

Some financial services firms voiced concern about the additional costs of recording cell phone conversations and the legality of recording conversations.JULIA WERDIGIER