All UK stockbrokers and hedge fund managers can expect their mobile phone conversations to be recorded as of mid-November 2011 under new rules to combat insider trading.
The UK's Financial Services Authority, which has in the past been criticised for being soft on insider trading, on Thursday released details of the new rules which removed an exemption on the retention of calls made on firm-issued mobile devices.
The new rule comes into effect on November 14, 2011, and requires firms to store all "relevant conversations" made on mobile devices.
Industry estimates have put the cost of recording and retaining all phone conversations in the millions.
One bank had estimated the cost to be £10,000 (AU$16,100) per trader a year, according to the FSA, while a global investment bank said retaining conversations across its BlackBerry fleet would cost £2.6m (AU$4.1 million) per annum.
While some smaller firms complained the rules would unfairly burden them, the FSA pointed to "cheaper" hosted solutions.
Investment houses will also be required to "take reasonable steps" to prevent the same conversations occurring on private equipment, covering all mobile and non-mobile electronic devices.
Firms and trade associations objected to the move, telling the regulator during a consultation that they were "unconvinced" that the cost-benefit case for the rule was proven.
They also said "determined" and "inventive" traders would circumvent the rules.
The FSA said firms must choose how to restrict devices and gear its communications policies around the types of communications used, whether that was voice or non-voice based.