As mobile phones become an increasingly important tool in trading, compliance efforts are catching up and requiring that conversations, and often any data, be recorded.

The UK’s Financial Services Authority will require that mobile calls be recorded just as company landlines are said Thierry Charvet, head of marketing and strategy at Orange Business Services, a provider of trading turrets and mobile support services. The FSA rules take effect mid November and other regulators will probably The SEC does not now require that business mobile calls be recorded, although Charvet expects similar regulation to be introduced in the States because mobile phones are so widely used in financial services.

“It is now more or less a given that traders are using mobile go some extent even to place some deals.” Some financial companies ban the use of mobiles for business, but they are under a lot of pressure from traders and sales traders to allow their use, added Charvet.

When the volcano erupted in Iceland last year and halted flights, many traders were stuck in airports or holiday spots far from their offices.

“If they were equipped with mobiles, they could go on trading to some extent; at least they could be do critical calls while being recorded,” Charvet said. “Mobile phones could also be part of business continuity planning.”

Several recording solutions exist. The mobile operator can provide it or the bank can record the call and archive it internally. On BlackBerry smartphones equipped with monitoring software, the call to a counterparty also triggers a call to the recording facility. Recording data, such as messages and trades, is relatively easy as well but regulators haven’t yet required the capture and storage of messages.

Ian Hook, marketing director at Compliant Phones in London, said mobile recording presents some challenges to avoid degrading the quality of the call. Compliant, which has been in the business for five years, uses software on the handset to trigger recording of BlackBerry and Symbian (Nokia) calls and will soon offer Windows 7 and Android as well.

“We can’t support the iPhone without breaking the licensing agreement and there are also a number of ways the iPhone operates that mean it is not secure enough for our customers,” he said.

For an effective compliance policy covering mobiles, companies have to require that all business calls be made on a company mobile, just as U.S. trading firms now typically ban the use of mobile phones on trading floors, because they are not covered by the recording that landlines are.

Since mobile phone recording hits operations and policy, Compliant suggests that financial services firms create a project team with communication, compliance, human resources, and legal along with front office and back office operations people.

Charvet said that introducing compliance programs provides more freedom for traders.

“It gives them the opportunity to be on the road, or to move from one trading floor to another. When they are working on complex instruments like derivatives where they have to meet with others on a team, that can be a great help.” Traders who have to work after regular office hours to monitor or trader in different time zones can use their mobiles to work from home at either end of the local trading day.

Using mobile phones in finance can also ensure keep traders updated. A market event, such as a stock’s reaching a pre-set price, can trigger a call to both a trader’s landline and his mobile, keeping him or her abreast of key events even if they occur while the trader is out of the office.

Some compliance programs also exclude recordings made to certain registered numbers, such as a trader’s wife, children or, presumably in France, his mistress. or for female traders, lovers who aren’t their husbands.

Today the UK is the most advanced in regulations; it has a November 14 deadline and no more meetings or appeals are planned. The FSA will require recordings be kept for six months. Compliant Phones suggests that firms should plan to meet the most stringent requirements which are apt to include a five-year record maintenance requirement in Europe.  Norway already requires that financial services firms record calls and Spain is apt to be next in Europe, while Switzerland and Singapore are looking at introducing mobile recording regulation.

Hook said he expects that the mobile recording requirement will spread across Europe and to the United States soon. Compliant is in a partnership with Vodaphone to provide location-based services in Europe to reduce roaming costs.

A B.I.S.S. Research whitepaper sponsored by Compliant Phones, suggests that mobile recording ought to be part of a broader policy on external communications which covers SMS, instant messaging and social media applications/sites such asTwitter, Facebook and LinkedIn along with other mobile devices such as iPads.

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