Slashdot Mirror
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."
What daunting technical issues? Nearly every instant messaging client has the ability to always log conversations. Simply standardize the clients that can be used, make sure that conversations are logged, and lock down the configs so that brokers can't change them. I see no daunting technical issues here.
My journal has hot
Can't they simply use Echelon instead??
If you keep throwing chairs, one day you'll break windows....
I struggle to see the value in this. If a broker wants to have an 'off the record' conversation they could still use their mobile phone or some other mechanism. 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?
Just build a custom Jabber server that saves everything serverside!
;)
Call it Corporate Jabber or something... Users should, however, be warned of the logging!
Recently, here in Denmark, an employee of a company was dragged in court, because she was sending private mails from work (through an online dating site). The court ruled that it was ok, and that the company should stay out of the employees private life - even if she had some [private life] at work. Go Denmark
Anyway, there are lots of things to think about when logging...
Any technology distinguishable from magic, is insufficiently advanced.
These new data retention laws are a boon to those of us in the data storage industry. If this keeps up I'm going to name my new yacht after the dude at the SEC (although "Cunt" is probably already taken).
From the facetime.com website;
"Since 1999, FaceTime has been delivering instant messaging (IM) solutions for the security, management and control of IM in the enterprise.
Our integrated enterprise IM management suite of products address the challenges of:
* Network and Information Security
* Regulatory and Corporate Compliance
* Call Center Customer Service
IM Auditor has been chosen by 32 of the largest 100 financial institutions and 7 of the 8 largest U.S. banks including Bank of America and Wachovia Securities to satisfy regulatory compliance requirements."
The one thing that wouldn't be addressed is encrypted clients suched as the recently discussed Nullsoft "Waste" IM client. However, with businesses increasingly becoming addicted to IM clients and Blackberry devices, this would be a far more palatable solution than banning IM completely.
Considering the recent media frenzy over Martha Stewart's case regarding insider trading, this really shouldn't come as much of a surprise. They're only trying to cover their own ass by having records for evidence if any insider trading information is being passed along with these instant messaging programs.
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."
The Slashdot summary says otherwise, but the press released linked to is pretty clear.
Brokerage firms make deals minute to minute, and conversations with a broker are legally binding. There isnt time to fax a contract back and forth. If you phone anyone at a brokerage firm, you will be recorded. Something to remember before you phone your mate and tell them about your weekend in ibiza. I totally understand why banks would view instant messages as the 21st century equivalent of a phone converstaion. Get over it!
It may not be an SEC requirement, but isn't it an NASD requirement? I've been working at brokerages for the last ten years, and it would have been unthinkable for us not to have our conversations recorded.
It wasn't just the traders and the salesmen, but the analysts as well. Maybe it wasn't a regulatory requirement, but it's definitely part of doing business in securities, because so much is done over the phone. It was actually surprising how little we used those recordings after they were made, but maybe we were just fortunate. Mostly it was to check trades, but the threat was always there that if you gave out inside information, you could be nailed.
Interestingly we were allowed to use mobiles on the trading floor, but I can imagine that people are much more cautious in the US. Post-Spitzer, they are all running very scared. Most US investment bankers that I talk to now, virtually have to append a disclaimer to everything that they say. Must make for some interesting pillow talk.
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 work at one of the large investment banks and instant messaging has become a large part of how traders do business. They communicate with people from other firms, quote prices, and even make trades. All of this is much more efficient and effective than email or even the phone. The recording of these communications is mostly there to settle disputes. If I quote a price to you over IM and you accept the trade is done, and if later you come back and dispute the price, there needs to be some way to settle it. This is the main reason phone calls and emails are all recorded and saved. It is a good deal for the banks, along for the SEC when investigations come up.