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Brokerage Instant Messages Must Be Saved
DrEnter writes "According to an AP story on Yahoo!, the National Association of Securities Dealers (NASD) has told its members that they must keep a copy of all instant messages sent or received by employees for at least three years. This is similar to their requirements on keeping e-mail, although technically not nearly as easy. The NASD is a self-regulatory organization, and U.S. federal law requires almost all of the 5,300 U.S.-based securities firms and brokerages to be a member of it. There's a news release from the NASD concerning the requirement - it looks like the daunting technical issues have already resulted in some firms banning the use of IM completely."
Actually at my firm, we do log all calls made from our traders' phones for a 3 year period, it's more a protection against illegally/incorrect executed market orders, and liability mitigation and it is not an SEC requirement.
If you think this is bad, we need to have full data backups for files, fax, and e-mail transmissions for a 7 year retention. That eats up a lot of tape...
Most banks already log phone calls, what is being added is the requirements to archive email and IM messaging.
Do a quick search for "Basel 2" or "Basel ii" for more details on this. One very interesting quote I found is;
"The Institute of International Finance has projected a total investment of US$2.25 trillion over 5 years for the 30,000 banks that will be affected, on top of systemsâ(TM) budgets, implementation costs and training. With such a huge increase in costs, this may precipitate another round of banking consolidation, especially in Asia. Basel 2 will certainly reward banks with sophisticated management and systems â" they should be able to generate higher returns on equity, and have less capital required by the market and regulators."
You're looking at it from the wrong side. The biggest issue is brokers is having clients ring up or whatever give instructions and then take issue later (when the trades goes bad, presumably) or the client saying the the broker told them X and it caused them a loss.
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The Slashdot summary says otherwise, but the press released linked to is pretty clear.
rules:
All emails are kept (Archived, not by us)
No external email accounts (it's a big offense if you use hotmail, etc, from work)
Internal instant messaging (logged, of course)
No external instant messaging (you crazy? Hell no -- you can't just install random software from the web on a trader's desktop
All phone calls are recorded (not sure how)
Cell phones are banned on the trading floors (I see them sometimes (and carry mine), but I think it's not cool).
There might be cameras, but I don't know.
All of this promotes accountability & transparency... and is good for clients and the market in general...
It's not like they look/read everything, but it has to be on file in case of a lawsuit, etc.
re: the guy talking about remote desktop, etc...
That might work at some firms, but I'd imagine most of the bigger firms are really, really locked down.
there is no thing
what else could you want?
I struggle to see the value in this.
No offense, but you struggle because you're a slashbot and don't know what you're talking about. All communication in and out of a dealing room is recorded. This is so a customer can call up and do a trade on the phone, and then can't "DK" - deny later making the trade. Also, it means that traders can't pass on information they shouldn't to outside.
Traders want everything to be recorded. Those tapes can keep you out of jail.
they could still use their mobile phone or some other mechanism.
Mobile phones are blocked inside dealing rooms. And even if they weren't, even being seen using one would get you in trouble. Sure you can pop down to Starbucks and make a call from there - in the 10 minutes it took you to walk down there, the market's moved, any information you might be sneaking out is probably obsolete.
Doesn't there come a point where you have to acknowledge that not all communication that takes place at a place of work is 'owned' (in a responsibility-for sense) by the employer?
Like I say, you don't know what you're talking about. Sure a dealer can make a personal phone call, if he gets time, the bank don't care, they just think he's schmoozing a customer. The only time the tapes are listened to is if something comes to court. This protects everyone involved, the customer, the dealer and the bank.