US securities regulators have put a further onus on
financial firms to keep records of their business, this time
focusing on the increasingly popular instant messaging
(IM).
The National Association of Securities Dealers (NASD) informed
its 5,300 members that they must retain their IM records for at
least three years. Under US law, every securities firm doing
business with the public must be a member of NASD.
The rule, which follows similar regulations with regard to
e-mail, could leave financial firms scrambling to rein in
employees' use of the quickfire communication tool.
NASD also advised that securities firms must supervise
employees' IM use, and that consumer IM products are often not
adequate because they do not allow for monitoring.
"Firms have to remember that regardless of the informality of
instant messaging, it is still subject to the same requirements as
e-mail communications and members must ensure that their use of
instant messaging is consistent with their basic supervisory and
record keeping obligations," NASD vice-chairman and president of
regulatory policy and oversight, Mary Schapiro, said.
While financial firms have been early adopters of corporate IM
products that offer archiving capabilities, the new rule could
still affect firms that have not set up monitoring practices or
have some employees who are using consumer IM products in addition
to company-sanctioned IM tools.
Francis deSouza, chief executive of IM management provider
IMlogic, said that the rule is a "wake-up call" to securities firms
that IM is a tool used for doing billions of dollars worth of
business and is no longer a toy for teenagers.
"Firms will now realise that they have to make their IM system
enterprise class, with monitoring, security and usage
reporting," he said.
Olivier Beauvillain, an analyst with Jupiter Research, said that
the new rule could lead companies to put the same sort of
restrictions on IM as they put on workplace web use, even if
employees are using it for personal reasons, to communicate with
friends and family.
The rule could spell good news for the growing number of
corporate IM suppliers. Leaders in the consumer IM market have all
rolled out corporate versions of their products in recent months
and could stand to benefit from the new regulations.
Scarlet
Pruitt writes for IDG News service