Sean Sullivan, VP of Product, eComms, at MCO, writes in CPA Practice Advisor about why communications recordkeeping and supervision remain an important examination priority for FINRA-regulated firms, even as the pace of SEC enforcement has slowed.
Why Does Communications Compliance Remain a FINRA Examination Priority?
FINRA examinations continue to identify weaknesses in firms’ ability to retain electronic communications, detect business conducted through unapproved channels and perform effective supervisory reviews. While these requirements are not new, firms still face challenges turning established obligations into effective controls they can demonstrate to regulators.
That challenge is becoming more complex as employees communicate across platforms such as Slack, email and Microsoft Teams. A single business conversation may move between several channels and include shared documents or meeting content. Legacy surveillance systems designed primarily for corporate email can leave firms without complete coverage or the context needed to identify potential risks.
Sullivan explains that firms need an integrated approach covering governance, prevention, detection, surveillance, recordkeeping, escalation and remediation. Communications data must also connect with other areas of compliance oversight, including employee trading, outside business activities, disclosures and internal investigations.
Although communications compliance may no longer generate the same volume of SEC enforcement headlines, firms must still be able to show that their policies, systems and supervisory processes work together across the full communications lifecycle.
Read the full CPA Practice Advisor article here: The SEC Changed Focus, FINRA Has Not.
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