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Investment Advisor (RIA) Messaging Compliance
RIA Compliance Archiving & Monitoring
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Regulators no longer tolerate inadequate recordkeeping and supervision of electronic communications. To address the explosive growth of email and instant messaging as critical business communication tools, SEC Rules 204-2 and 206(4)-7 of the Investment Advisors Act require Investment Advisors to implement a compliance archiving & monitoring solution to archive and supervise all electronic communications such as email, attachments, IM (AOL, MSN, Yahoo, LCS etc.) and Bloomberg®.
Global Relay's Message Archiver, Compliance Reviewer, Message Converter and IM Interpreter are specifically engineered to provide a total compliance solution for Investment Advisors subject to the stringent compliance requirements of the SEC in connection with electronic business communications, including:
- Recordkeeping
- Supervision
- Audits
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Recordkeeping
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The Message Archiver, Global Relay's message archiving and compliance system, captures and archives an authentic and complete record of all electronic business communications in a secure but easily accessible offsite storage system. Compliance features include:
- Message Capture of email, attachments, IM & Bloomberg
- Archives messages for 5 year SEC term (or as defined by deletion policies)
- Access includes web-based instant access for all employees to their messages
- Tamperproof protection of data on dedicated WORM (Write Once, Read Many)
- Offsite, mirrored, single instance storage in East/West Coast Data Centers
- Indexes & serializes messages, Bcc & Distribution Lists, metadata & audit trails
- Search & retrieval of any message in seconds using Google-like search engines
- Security & encryption of systems, networks & messages
- Migration of legacy data (.pst files, backup tapes) & to archive with new messages
- Retention Term flexibility for Litigation Holds & SEC investigations
How does the Message Archiver work? All email, attachments, Bloomberg and IM and are securely captured and centrally unified together with imported legacy email and .pst files, in Global Relay's Message Archiver for rapid online search, retrieval & monitoring. With secure web-based access and real-time indexing powered by search engine technology, every employee and Compliance Officer has the ability to find any current or historical message in seconds. Read More »
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Supervision
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The Compliance Reviewer, Global Relay's monitoring system, provides Advisors with a turn-key, flexible, online supervisory system with advanced monitoring, filtering and eDiscovery features enabling enforcement of your firm's email & IM policies for compliance, proper usage and corporate governance. Compliance features include:
- Scan & Monitor email, attachments, IM & Bloomberg from online Archiver
- Content Filtering with company-defined rules to identify prohibited content
- Advanced Analysis with Boolean logic, criteria lists, proximities & action alerts
- Random Sampling of each advisor's messages customized by percentage & user
- Keyword Search results are highlighted within the message for quick discovery
- Full Review of messages & attachments, or bulk review of headers only
- Reviewer approval, rejection, escalation based on action icons & defined notes
- Multi-tiered Review structure for review escalation to Super Reviewers
- Wizard Commands for pre-defined, single-click compliance using folders, flags, priorities & labels
- Exclude Words, phrases or email accounts (e.g. disclaimers, attorney-client privileged mail, newsletters) from Flagging Rules
- Access Rights of authorized Reviewers governed by customized security rules
- Notifications of compliance violations by email or IM
- Audit Trail with detailed time history of reviews and related actions taken
- Web-based Control Center to modify surveillance & monitoring procedures
How does the Compliance Reviewer work? Using powerful search engines, the Compliance Reviewer is able to retrieve your firm's messages from the Message Archiver and apply easy-to-use, company-defined filters and Wizard Commands for efficient review and monitoring of all archived email, IM, and Bloomberg messages. Messages of any user are analyzed on import and flagged for review if violations are detected as follows:
- real time filtering for keyword or phrase violations (start-up list provided)
- specific query using flexible search criteria
- advanced rule-based keyword & phrase proximity analysis
- random sampling (by User, User Group, or firm-wide, using percentages).
Read More »
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Audits
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Global Relay's Message Archiver & Compliance Reviewer Audit Tools are designed to facilitate efficient responses to regulatory audits and evidentiary requests. Global Relay has successfully assisted hundreds of SEC-regulated firms during their audits and regulatory investigations. Currently, Global Relay participates in approximately 3 to 6 customer audits per week.
- Search & retrieval of any message in seconds using Google-like search engine
- Audit Request response within minutes using online search and eDiscovery tools
- Statistics & reporting on Compliance Officer reviews & related actions taken
- Retention Term flexibility for Litigation Holds & anticipated investigations
- Legal Compliance in-house specialists to assist during audits
- Case Management via folder system with shared folders (e.g. external attorney review)
How do Global Relay's Audit Tools assist with an Audit? Global Relay provides flexible and efficient methods to produce records according to the specific criteria of the audit request. Messages are made readily available for examination either by:
1. Online review of messages via an "auditor account" in Message Archiver
- create online search parameters based on Audit request
- restrict access to the exact scope of the audit (by date, user, subject etc.)
- assign Auditors temporary online review privileges
- block attorney-client privileged, personal or restricted messages
- generate an automatic audit trail of Auditor's review (ie: audit the Auditor!)
- side benefit of data no longer in Auditor's possession once audit is complete
2. Compilation of data for delivery to SEC
- fast discovery, consolidation and organization of data for export & delivery
- compile requested information on regulator-qualified media such as DVD or CD
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Frequently Asked Questions
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What are the email & IM Compliance Requirements for RIAs?
In connection with "maintaining electronic records" under Rule 204(2), firms must:
- Preserve all SEC-mandated records (incoming, outgoing) regarding the Advisor's business
- Store records on tamperproof electronic storage media
- Retain records in an easily accessible place for a 5-year period
- Retain records in an office of the advisor for the first two years of the retention period
- Arrange & index records for easy search, retrieval and access
- 'Promptly' produce records defined as immediately, up to a few hours of request time
- Produce authentic copies of records in original format, and printouts of such records
- Provide access for regulators to view and print electronic records
- Store original and duplicate copies of records in separate locations
- Establish and maintain procedures to ensure document integrity is maintained
- Verify that reproduced records are true, complete and legible when retrieved
- Undertake annual reviews & store review results (Rule 206(4)-7)
What is the significance of these SEC rules?
Regulators no longer tolerate inadequate recordkeeping and supervision of a firm's electronic communications. In response to the explosive growth of email and IM as the principal communication tool, requirements designed to protect investors from misrepresentation and fraud via electronic communications, and to prevent record tampering are now mandated. The SEC has adopted amendments to Part 275-Rule 204-2 of the Investment Advisers Act, which identifies records that must be stored electronically relating to the business and imposes requirements regarding the preservation, accessibility and retention of all such records.
Who must comply?
Investment Advisors registered or required to be registered under Section 203 of the Investment Advisors Act (1940). The majority of State-registered Investment Advisors have similar regulations. Note that Rule 204-2(a) requires the preservation of records relating to "its investment advisory business" which should include preserving email of a firm's registered Advisors, as well as associated persons to the business.
What are the repercussions of non-compliance?
Increasingly, regulatory investigations focus on business records and on stricter enforcement of electronic records in particular. Firms cannot afford to have a casual attitude toward electronic record management.
Civil penalties may range from $5,000 to $100,000 for individual Advisors and $50,000 to $500,000 for organizations. Criminal penalties may involve up to five years imprisonment or up to a $10,000 fine. Further consequences of non-compliance include internal and/or regulatory disciplinary actions, civil liability, damaged corporate reputation, loss of goodwill and customers.
Where can this Legislation be found?
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Canaccord Capital & Canaccord Adams, with IDA, FINRA and LSE Memberships, chose Global Relay to deliver email, instant messaging and Bloomberg Archiving, Compliance and Continuity to 2000+ employees spanning three continents.
Westwind Partners uses Global Relay to outsource all their email compliance under the IDA, FINRA and FSA/LSE.
Chicago Stock Exchange selected Global Relay's robust Compliance Archiving & Monitoring services to deliver secure, compliant, scalable, high-performance archiving & monitoring to its employees & Member Firms.
Customer Testimonial
"We use Global Relay to outsource our RIA email compliance, and they have been phenomenal. It's been so different from the typical experience."
Gregory H. Friedman, MS, CFP
President & Founder
Friedman & Associates
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