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).
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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