4 brokers install mandatory phone recording system
View(s):Four stockbrokers have installed a telephone system that records all transactions which the Securities and Exchange Commission (SEC) has made mandatory, SEC officials said. Enterprise Ceylon Capital, Richard Peiris Securities, Capital Alliance Securities and First Guardian Equities have implemented it so far, they said.
“Six more companies are in the process of implementing it,” an official told the Business Times. This system was incorporated into the stockbroker rules in August 2012 by the Colombo Stock Exchange (CSE) which stipulates that broking houses should use a telephone recording system to record clients’ order instructions and maintain these records for at least six years.
The CSE rules say that stockbrokers have the option to obtain written instructions from clients and maintain these records for at least six years, but now the SEC wants to make this rule mandatory as the regulator has received many complaints pertaining to client broker transactions which dispute certain instruction from clients and irregular transactions.
The official added that preventing, detecting and deterring market abuse is one of their key priorities. “We have seen that market abuse is one of the most difficult offences to investigate and prosecute. Good-quality recordings of voice conversations and of electronic taping will help firms and us detect and deter inappropriate behaviour,” he added.