Enterprises must ensure financial compliance by establishing message archives for all communications related to their business. It is required by FINRA and can also protect your Firm if an employee engages in unethical or illegal business activity. FINRA stated that you could avoid being penalized for wrongdoing among individual professionals if they can show that they proactively and adequately capture and monitor all electronic communication.
FINRA’s Archiving Requirements
FINRA compliance in chat text messaging apps must archive their messages for regulations intended to ensure that financial information sent or received by financial service organizations is secure, accessible, and easy to access. You can find the archiving requirements for electronic communication in the Books and Records Key Topic of FINRA’s Rules and Guidance Section of FINRA’s website.
In addition, FINRA allows non-firm email accounts and systems to conduct business. However, all communications must be archived and comply with the above requirements. If a Firm cannot meet the record-keeping requirements for a particular type of electronic communication, FINRA will not allow them to use it.So even the most popular app in China called WeChat, that have a billion Monthly Active Users (MUA), also complieswith FINRA. WeChat compliance in FINRA makes the company avoid any complications to their firms.
Firms must establish a process to review communications on a regular schedule to comply with the Message Archiving requirements. Documenting the review process is essential, and you should be able to provide such documentation to regulators upon request. This ensures financial advisors and firm executives are not engaged in wrongdoing. It also protects your Firm against any disciplinary actions.
FINRA Rule 3110 states that firms must place certain associates with a history or past misconduct under heightened surveillance. This means they will conduct more detailed communications reviews with customers and associates. The Firm must create separate policies and procedures for monitoring an associate with a history or past misconduct. It also has to routinely review those supervisory procedures to ensure they are appropriate for the individual. See FINRA’s Notice about heightened supervision for guidance on identifying associated persons who require heightened supervision.
Failure to Archive: The Price
Administrative Proceeding File No. 3-20050 describes an enforcement action taken against a California-based registered broker-dealer in September 2020. It involved the destruction of business-related texts sent and received by several registered representatives, including senior management. This occurred when they communicated with one another, customers, or third parties. The Firm was fined $100,000. Thus, connecting with LeapXpert can provide archiving solutions ensuring business compliance and safety. Visit their website https://www.leap.expert/ to discover more about their products and services.