By 
The emergence of digital communications technologies, such as WeChat and Telegram, has improved work-related communication processes, especially in the onset of the COVID-19 pandemic. Their continuous growth led to Securities and Exchange Commission(SEC) and Financial Industry and Regulatory Authority(FINRA) updating their compliance regulations and including provisions concerning hybrid work models.
Registered businesses are expected to follow through, but to the surprise of the regulators, some still fail to implement monitoring and archiving systems. This motivated them to accelerate enforcement activities, so member organizations adhere to communication compliance. Failure to comply with WeChat compliance, for instance, can subject the offender to hefty fees and legal penalties.
SEC Director of Enforcement Division GurbirGrewal delivered a speech in October 2021detailing the significance of implementing proactive compliance in work environments. Grewal also noted the importance of customer relationship summaries (CRS) and regulation best interest (Reg BI).
Following this event is the so-called “sweep,”or the SEC’s conduct of systematic inquiry into multiple banks it suspects have compliance issues. SEC contacted financial firms to inquire about their record-keeping of workers’ communications, such as emails and text messages, for Telegram compliance.
Among the regulations that SEC-regulated broker-dealer firms must submit themselves is to the commission’s Rule 17a-4. This rule requires regulated firms to record and store e-communications data for at least six years. The recorded data must abide by the Write Once Read Many (WORM) compliance to prevent any data modification. Keeping backup copies and storing them separately from the originals are also required.
Meanwhile, FINRA notified its managed organizations using social media for business communications to monitor and archive the likes of social media posts, chats, and text messages as a regulatory requirement. The regulatory commission’s supervision rule 3110 mandates members to develop and maintain infrastructures for compliance.
Given the serious intention of regulatory bodies to enforce compliance, organizations must look for a robust monitoring and archival solution to avoid future SEC sweeps. Such a step can help them keep business-related communications. Aside from ensuring compliance, purchasing archival products can strengthen security against financial fraud.
For more information about the matter, refer to this infographic by TeleMessage.
Comments