FCA, FRC and PRA introduce welcome package of measures to help businesses and audit firms weather the COVID-19 storm
Since March 2009, FSA rules have required firms to record ‘relevant communications’ and keep them for six months. ‘Relevant communications’ refer to voice conversations and other electronic communications that involve the receipt of client orders and negotiating, agreeing and arranging transactions in the equity, bond and financial and commodity derivatives markets. Essentially these rules were aimed at tackling market abuse, although there is collateral benefit for the FSAs supervisory functions. For technological reasons mobile phones and mobile communications (except emails) were excluded from these rules, and although there was a consultation process to review this exemption in 2010, this exemption still stands.
Under the Regulation of Investigatory Powers Act 2000 (RIPA), the FSA has powers to conduct surveillance and information gathering for the prevention and detection of crime. This is the same piece of legislation that has been criticised for empowering local councils to “snoop” on the public.
Under RIPA the FSA is able to:
However, the FSA is not able to obtain warrants to intercept communications during the course of transmission ie. they are not permitted to wiretap telephones.
Authorisations for the acquisition of communications data, the carrying out of directed surveillance and the use of CHIS in FSA criminal investigations must be approved by a Head of Department in the Enforcement Division. There are various considerations before authorisation is granted, including ensuring proposed action is necessary and proportionate in the specific circumstances and assessing any risks of infringing the privacy of individuals who are not the subjects of the investigation or operation. In exercising powers under RIPA the FSA has regard to the relevant RIPA codes of practice.
It is possible that the FSA could set up a joint investigation team with other agencies who do have the power to obtain warrants to intercept communications during the course of transmission. If so, the current situation is that these can be used as intelligence to assist in the furtherance of the investigation but cannot be used as evidence in trials in the UK. However, if these interceptions were made in other jurisdictions, those recordings could be admissible as evidence in the UK courts. Similarly, if someone records a call that they are taking part in, such recordings may also be admissible.
For further information, please contact: Louise Hodges
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