Mobile Devices Face Recording Deadline

Terry Flanagan

Swaps dealers and major swap participants face a looming deadline for compliance with Dodd-Frank mobile recordkeeping requirements.

On December 21, 2013, all SDs and MSPs will need to maintain accurate records of all oral communications – including those conducted electronically – leading to the execution of swaps.

As part of the oral communications amendment, swaps dealers (SDs) and major swaps participants (MSPs) must ensure that all relevant calls and electronic communications conducted on mobile devices –including text messages and voicemails – are recorded, and the data is stored for at least 12 months. Similar rules were first introduced in Norway, and later implemented in the United Kingdom in 2011.

“While the recording of fixed-line conversations is nothing new in the U.S., the recording of mobile devices creates a whole new set of challenges for IT managers, who must now manage complexities related to regional variations in policy and the inconsistent and variable nature of mobile networks globally,” said Paul Liesching, senior vice president of Truphone Mobile Recording.

According to Truphone, a provider of global mobile recording solutions, technology-based approaches include application-based recording and network-based recording.

With application-based recording, the software is installed on the phone to control the device’s call routing functionality. The software routes the call through a server which then records it. One of the major downsides to this approach is that the process can interrupt the call, resulting in delays in both inbound and outbound calls anywhere from 5 to 20 seconds.

Application-based technology has also failed to tackle the challenge of roaming handsets which travel abroad. The added layer of complexity introduced by roaming conflicts with the recording application and can result in the call not being recorded, or not being made or received when the user is abroad.

With network-based recording, a mobile recording-enabled SIM card is put into the phone and recording happens automatically, subsequently taking place for all calls and messages. It’s ideal for organizations that have multiple devices or expect to see a movement of their phone estate towards BYOD.

Network-based recording is also good for users that travel frequently. Because it taps directly into the mobile network infrastructure, it can work seamlessly around the world – provided the user is connected to the network being recording.

“For those who are worried about the costs of complying with the regulations, network recording can also be more cost-effective,” said Liesching. “Unlike application-based recording, there are no extra calls to the recording software. You only pay for the cost of one call. There are no call delays either, giving a seamless end user experience.

Separately, EE, which operates a 4G mobile service in the United Kingdom, has launched Mobile Voice Recording, which it says is the UK’s first network-integrated service that fully complies with Financial Conduct Authority mobile trading regulations.

Mobile Voice Recording assists firm’s compliance with FCA regulation that requires mobile phone communications relating to transactions in the equities, bond, derivatives and financial commodity markets to be recorded to help deter and detect market abuse in the UK. The service has been jointed developed by EE and Etrali Trading Solutions, an integrator of voice capture and voice analytics platforms for the financial markets.

“Mobile Voice Recording has the potential to be a real game-changer for the industry,” said Robert Powell, global head of compliance at Etrali Trading Solutions. “Users get a normal mobile call experience. Compliance departments can easily recover calls and use advanced analytics in downstream systems to meet increasing regulatory requirements.”

Related articles

  1. Deutsche Borse-LSE Merger in Focus

    Instinet Fox River Quant Solution will initially be rolled out in the Americas.

  2. Algos, Post-Trade Top FCM Concerns

    Instinet's Anushree Laturkar says investing in research and analysis is key to improving client outcomes.

  3. The new platform launched via a partnership with BestEx Research.

  4. It is the first liquidity-seeking algorithm on Atlas, the equities trading platform introduced in 2019.

  5. Algorithms in Focus

    Strategy Studio allows brokers to create their own execution platforms.