FSA PS10/17 Can You Afford not to Comply?

Published on Tuesday, 03 May 2011 13:58

Written by JP Reis

Mobile Communications no Longer Exempt from Recording Requirement

JP Reis has been advising many clients on how to comply with the FSAs removal of the exemption for mobile devices from its COBS (Conduct of Business Sourcebook) taping policy.  In the traditional definition of IT consultancy, this would involve a discovery phase and a needs analysis followed by the selection of a technology and vendor that meet these needs. The modern IT consultant cannot simply operate on this level and this is particularly true in the complex regulatory environment that is the wholesale financial industry.

Establishing the Best Course of Action

The initial questions in the discovery phase should be ‘What is it I need to do and what are the consequences of not doing it?’  Regulations are generally not written by technologists and requirements that seem pretty straightforward to the layman are not necessarily so.  For example, if an employee buys their own Blackberry with its own wireless plan but then connects it to a company owned Blackberry Enterprise Server for email, is it ‘Company Owned’? Clearly there are grey areas; this is not unusual for new regulatory requirements which are generally clarified over time.  The consequences of not complying will be ‘taken on a case-by-case basis’.  It could be argued that the value proposition should be to spend the minimum amount of money but put a very firm veneer around the effort to comply.

Behind the Regulation

In making this assessment, it is generally best to consider the intention behind the regulation.  As with all forms of recording, the intent of removing the exemption is to store a record of behaviour around a deal and trading affairs in general.  For me, the key word in this statement is ‘behaviour’.  No amount of technology and regulation can protect against the corrupt.  Our advice is to engage in a little introspection, prior to engaging with an IT consultancy, to ensure that the morality underlying the organisation is sound and stridently communicated.  As technologists, we can then provide solutions that assure that these moral codes can be explicitly enforced where communication technology is used.  No amount of technology can insure against bad business practice.

Contact our London office

Read FSA Policy Statement 10/17