SEC Wants Advisers to Enhance Monitoring of Alternative Messaging Systems
The SEC’s Office of Compliance Inspections and Examinations (OCIE) wants investment advisers to enhance procedures and surveillance for electronic messaging including texts, IM, and personal email. OCIE advises firms to employ software to monitor social media and websites and regularly run internet searches to identify employees engaging in unauthorized online activity. The staff also recommends that advisers either prohibit the use of personal devices or create a system to ensure that employees move messages to a system that the firm can monitor and retain. Employees should also be required to vet personal devices with IT staff for security and message retention.
OCIE is probably correct that adviser personnel use alternative messaging systems for business communications that avoid the prying eyes of compliance. Yet, it seems futile to require compli-pros to try to herd these cats around the internet. Perhaps, the SEC should take a broader look at alternative messaging and the securities laws by commissioning a task force to consider practical regulations that can be followed and implemented.