|
Instant messaging (IM) is widely used by Wall Street traders, but traders are on notice from federal regulators that all messages have to be saved, stored, and retrievable, or the Street should forget about using IM. Regulations governing IM usage in the financial industry include the NASD's Notice to Members (03-33), which describes the expectations of regulators for member firms using IM. The notice unequivocally states that the 'content and audience of each type of electronic communication determines the appropriate supervisory and record-keeping treatment.' Such record-keeping treatments include the Securities and Exchange Commission Rule 17a- 4, which also stipulates that content, rather than the medium, determines retention. Other regulations are NASD rules 3010 and 3110. Damon Kovelsky, capital markets research analyst for Financial Insights, emphasizes that use of public IM services by traders is unacceptable, and says they should only use private IM systems that have been developed internally or have been licensed from such vendors as Reuters or Bloomberg. Kovelsky also points to a requirement for use of retention and storage services from such vendors as Zantaz and Iron Mountain. IT staff have to block access to a public IM system through the firewall, because such communications tools 'do not yield a clear, sequential, and retrievable audit trail.'
|
Information Sources, Inc.
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}