Firms advised to meet Telephone Recording regulations, whilst avoiding risk and ensuring evidential weight

At a recent seminar held ahead of the March 6th 2009 FSA deadline to record and store all relevant telephone and electronic communications, firms were advised to meet their ’Taping’ requirements, whilst avoiding risk and ensuring the evidential weight of their documentation.

Organised by Open-Tec and Obsidian Wireless who have developed a data capturing and Repository solution for mobile voice and SMS recording and storage, attendees also heard the views of the FSA’s Sumaiya Khoda, and Peter Howes, a member of the BSI panel responsible for their evidential weight and legal admissibility codes/standard.

Commenting on the seminar, attendee John Bromley, Manager of Voice & Market Data Services at Commerzbank, said: “We found the quality and content of the day to be excellent. The presentation by the FSA was informative, and noted with interest that one of the principle reasons they have delayed mandating the recording of mobile communication was because, at the time, solutions were not widely used or sufficiently proven. The seminar opened up new areas of thought around the importance of not just of storing information for the regulators, but as a key requirement of a broader risk management strategy and the absolute need to ensure that any captured data has evidential weight. The live demonstrations showing the capture of voice, SMS and Instant Messaging were also impressive.”

The new FSA requirements state that a firm must take reasonable steps to retain all relevant records made by it for a period of at least six months and in a medium that permits the FSA to access the records readily. Where corrections or amendments are required to such records then the situation prior to these changes should also be easily ascertained from the records – i.e an audit trail needs to be maintained of the changes made. This new requirement will help firms to deter market abuse if staff know that their conversations are going to be recorded. Mobile conversations have been made exempt from this regulation at present, this will be reviewed mid to late 2009. However industry expects that this will be included as the current typical solution, which is to ban use of mobile phones, is impractical.

Sumaiya Khoda from the FSA said: “Preventing, detecting and deterring market abuse is one of our key priorities. However, market abuse is one of the most difficult offences to investigate and prosecute. Good quality recordings of voice conversations and of electronic communications (taping) help firms and us detect and deter inappropriate behaviour.”

Alan Stewart, Director of Open-Tec, explains: “The FSA’s taping requirements put IT departments within financial organisations under yet more pressure to provide the right solution to the business. Together, Obsidian Wireless and Open-Tec can deliver a unified capability to meet requirements now and in the future for the capture, storage and retrieval of all electronic information.”

Paul Liesching, CEO of Obsidian Group, comments: “The relationship between risk, regulation, compliance and technology is key for everyone operating in the financial sector at present. It’s now fact that mobile communication is the universal cornerstone of commercial communication but at the same time, due to the increasingly powerful nature of the technology, mobile communications represents a very significant point of risk. Success will be based on the convergence of compliance and technology and the solutions demonstrated at the event are proof that help is out there.”

Peter Howes, a member of the BSI panel responsible for their evidential weight and legal admissibility codes/standard, said: “Doing nothing is no longer an option, and there are many benefits to compliance. These include: safeguarding the value of evidence; protecting your organisation; reducing the likelihood of challenge; reducing risks; improving information; availability; reliability; quality; evidential value; preparing for migration and finally and perhaps most importantly, reducing costs.”

Open-Tec’s solution offers organisations a repository or archive system that can take in all these different content feeds and store the data in a secure manner that allows the appropriate retention policies to be applied. It can index all the data to enable easy search and retrieval of the relevant information when it is needed. An additional and important piece of functionality is the ability to perform an electronic discovery on the data as it may well be required to be presented in a court proceeding. This then makes evidential weight important; an excellent measure of this is the code of practice from BSI, namely BSI BIP 0008, which is specifically written as a best practice to maximise the evidential weight of electronic data.

Ends

For further information please contact Open-Tec’s Press Office or visit www.open-tec.com

Katie King
Mobile: 07525 727288
Email: katie {at} 2thefore(.)biz

About Open-Tec – Open-Tec are a software and solutions company that for the past 4 years have been developing CStore, a compliant repository that meets the aforementioned requirements. It is specifically designed to the BSI BIP 0008 Code of Practice. In addition CStore was also designed to accept any form of electronic data. With in-built encryption, retention, indexing and e-discovery engine, this offers an ideal single solution to meet the MiFID requirements for now and in the future.

The current implementation of CStore enables an organisation to take inputs or feeds from Voice recording, SMS, eMail, Instant Messenger, Videoconferencing, Fax, Scanned Documents, Files and databases into a single repository. Open-Tec have partnered with Obsidian Wireless to integrate with their mobile voice and SMS recording solution and thus enabling any organisation to properly record all types of voice calls and SMS into on single repository.

About Obsidian Wireless – Obsidian Wireless addresses the Mobile recording needs of the financial sector. Founded by experts in the Financial and GSM industries, Obsidian has invested heavily in understanding the operational, regulatory and technical needs of the finance sector to ensure that its solutions meet every requirement.

Obsidian’s solution works on BlackBerry, Symbian and Windows Mobile to capture all inbound and outbound Voice and SMS. Obsidian’s solution integrates with most voice recording systems and can be provided on an in-house or hosted basis.