05/22/2018

Archiving: How It Helps Financial Organizations Achieve Regulatory Compliance

by Guest Blogger David Bisson


Social media has become an important business tool in the digital age. Enterprises can create a presence on LinkedIn, Twitter and Facebook and use these profiles to engage their customers on an ongoing basis. Such activity broadens limited transactions with customers into connected relationships, which organizations can leverage for additional business opportunities.
 
But social networking comes with many dangers. For example, the European Union just recently announced its intention to start cracking down on so-called "fake news" in social networking sites. Its decision goes beyond Facebook's data scandal involving Cambridge Analytica. It also reflects how many social media platforms (at least until recently) welcomed all actors to speak their minds, including some who would deliberately try to mislead others.
 
These falsehoods can negatively affect businesses' relationships with their customers. With registered investment advisors (RIAs), it's even worse. False information on social media can influence investors and lead to uninformed business decisions, thereby costing investors money. The Financial Industry Regulatory Authority, Inc. recognizes this fact, which is why it published Regulatory Notice 10-06. The rule clarifies that all organizations must retain records of their communications, including those involving third-party links shared on social media, as required by Rules 17a-3 and 17a- 4 under the Securities Exchange Act of 1934 and NASD Rule 3110.
 
So how can organizations achieve compliance with Regulatory Notice 10-06?
 
Obviously, organizations need to do a bit of archiving on their part. But printing and filing the content of every published post or shared link on social media isn't a feasible long-term strategy.  John Male, director of financial planning at G&G Planning Concepts Inc., an independent financial planning firm in New York, agrees with that assessment.
 
"Link compliance is a huge issue today so financial firms must have procedures in place to adhere to the most stringent broker-dealer rules," Male said, as quoted in a blog post for archiving provider Erado. "A person might be tweeting 10 to 15 times per day, and the process of printing links would not only be terribly erroneous, it would be a full-time job in itself."
 
Organizations need a more reasonable solution to help them achieve compliance. Zix is well aware of that requirement and recently acquired Erado to meet its customers’ needs.
 
With this acquisition, Zix can now combine its email security leadership with Erado's expertise in archiving email, websites, blogs, instant messaging, mobile and social media. This experience includes embedded-hyperlink-capture services that capture third-party links shared across social media channels of an organization and archive the content of those links. Together, the two companies can help RIAs achieve compliance with FINRA's requirements.
 
David Wagner, Zix's chief executive officer, is excited about the possibilities this new acquisition can bring. As quoted in the Zix announcement:
 
Our customers are increasingly requesting that we provide additional email protection services. The acquisition of Erado enables us to meet our customers’ needs, strengthen our leadership position, and expand our cloud-based archiving capabilities beyond email to all forms of digital communications. This acquisition, together with our Q1 2017 acquisition of Greenview Data, represents the successful continuation of our previously stated growth strategy.
 
Interested in learning more about archiving solutions? Come visit Erado and Zix at the 2018 FINRA Annual Conference between May 21 and May 23 at the Washington Marriott Marquis in Washington, DC.
Posted: 5/22/2018 3:58:47 PM by Olivia Pramas | with 0 comments


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