Financial Messaging Archiving

Find out more about the importance of financial messaging archiving to meet regulatory requirements and keep on top of misconduct risks.

21 March 2024 3 mins read
by Jennie Clarke

Financial Messaging Archiving

Financial messaging archiving is the process by which firms capture business communication data and store it compliantly to meet regulatory recordkeeping rules. More specifically, this refers to the capture of traditional business ‘messages’, such as emails or letters, as well as emerging digital communication channels such as SMS or WhatsApp.

WhatsApp made waves in the financial services industry in September 2022 when 12 firms were fined for the unauthorized use of the messaging app. Collectively, they settled millions of dollars, after realizing that without proper financial messaging archiving or monitoring, several regulations were violated. Since this initial fine in 2022, fines for similar use of off-channel communications have reached over $3 billion.

These fines occur where firms are not properly archiving their company’s business communications, which they are required to do by varying regulations.

Regulations for financial messaging archiving

There are several key regulations that mandate financial messaging archiving:

  1. Investment Advisers Act of 1940
  2. FINRA 4511
  3. SEC Rule 17a-4
  4. MiFID II Article 72
  5. FCA SYSC 10.a
  6. FCA COBS 11.8

In brief, some of these requirements are as follows:

Investment Advisers Act of 1940

As mandated by the SEC in the United States, all communications records between advisers and their clients must be maintained for no less than five years. This includes text messages, and all instant messaging like WhatsApp.

FINRA Rule 4511

The financial industry regulatory authority requires broker-dealers to record their communications with clients, as well as gain informed consent from clients to store these messages. These must be maintained for a minimum of six years.

SEC Rules 17a-3 and 17a-4

This recently-updated rule requires firms must ensure the retention and preservation of all transactions and official business records – including all communications. These records must be stored in a secure, non-erasable location.

Message archiving compliance

Compliance professionals know that firms must be clear in their internal policies, and the responsibilities of staff. Moreover, it’s almost impossible to manually archive and maintain SMS conversations. Therefore, firms can work most efficiently by partnering with automated archiving platforms.

Global Relay works with regulated firms to record, archive and secure messages at scale. Mitigate risk with military-grade encryption, and use the navigational search and retrieve function to find communications quickly and fulfill your archiving needs. 

Speak to a specialist at Global Relay to learn more. 

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Published 21 March 2024

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