The United States Securities and Exchange Commission’s (SEC) strict implementation of regulations on communication compliance has resulted in several financial firms receiving massive penalties. These sanctions are for not supervising their business messages sent via third-party messaging solutions.
Along with enforcing its regulations, the SEC has collected nearly $3 billion of fines and penalties in 2024, all to settle companies’ SEC-related violations. This has also led various firms to be obliged to follow the SEC and the Financial Industry Regulatory Authority’s (FINRA) mobile compliance rules.
The SEC mandates that broker-dealers secure electronic communications such as chats, emails, and voice calls via various messaging platforms, advising them that safeguarding these data must be time-stamped and retrievable. Further, the SEC requires firms to keep records of their promotion and marketing materials.
Through violating these regulations, consequences such as loss of reputation, suspensions, and resource constraints will be given. To avoid such, here are some strategies that a firm should consider to be penalty-free from the SEC:
Use a Designated Messaging App For Supervision
Various instant messaging (IM) platforms like Messenger, Telegram, WhatsApp, and the like are now widespread in business. To ensure that firms act in accordance with SEC rules, it is advisable to distribute company phones with installed messaging apps for easy monitoring. This could capture the employees’ actions in communicating.
To ensure data record-keeping, it is better to use a messaging channel with built-in features for auditing message modifications and deletions.
Set Up Archiving Solutions
Installing and setting up efficient archiving solutions and access controls is also an effective way to secure instant messaging solution data. An archiving solution instantly captures an employee’s messaging transactions and communication, including text messaging, emails, MMS, voice calls, documents, images, other multimedia files, and emojis.
Enforce Communication Policies
A firm can also implement its communication policies to guide employees. This could be an internal communication strategy that helps employees establish their principles and decisions in conversing. Through these policies, they can interact with their colleagues and clients while adhering to SEC regulations to avoid violations.
Conclusion
With the enforcement of strict regulatory compliance today, financial firms must be consistent in studying and sticking with the rules to prevent receiving sanctions. It is also essential to find a reliable messaging solution that is user-friendly and more convenient for the employees to handle.
If you are interested in learning more strategies on how to secure mobile messaging solutions, read more at TeleMessage.