LONDON (Reuters) - Britain’s Financial Conduct Authority has proposed stricter rules requiring bankers advising companies on corporate finance to record all telephone calls and electronic communications, in a bid to clamp down on insider trading and other market abuses.
In its third consultation paper on the European Union’s landmark reform of securities markets, published on Thursday, the FCA said it would widen the scope of existing rules on taping calls to include corporate finance activities such as advice on capital raising and mergers.
“The knowledge that telephone conversations and electronic communications will be recorded...will deter a greater proportion of individuals from potentially committing market abuse,” the FCA said.
The rules will also be widened to include financial advisers for individual retail customers. The consultation on the proposals is open until Jan. 4 2017.
The consultation paper forms part of the FCA’s discussion on the implementation of the Markets in Financial Instruments Directive, a set of reforms that will overhaul the way securities and commodities are traded in Europe - better known as Mifid II.
The rules are designed to apply lessons learned during the financial crisis to better protect companies and investors and to stamp out market misconduct.
The FCA’s proposal to include corporate finance in the scope of calls that must be recorded goes beyond what is included in the Mifid II rules, the FCA said.
Reporting by Lawrence White; Editing by Adrian Croft