Mobile Phones Pose Compliance Challenges04.14.2015
U.S. regulators are catching up to their European counterparts in requiring recording and archiving of mobile phone communications, a tricky area that has come to the forefront given the ubiquity of hand-held devices.
That’s according to Mark Miller, general manager and chief product officer at T-Ware Connect, a subsidiary of UK-based TeleWare.
“We came with a very secure encrypted solution to the market in the UK when the FCA introduced new regulations to record the mobile phones in that market,” Miller told Markets Media. “Obviously, Dodd-Frank came along in the U.S. and had very similar rules but restricted to swaps deals. It’s not as all-embracing as it is in the UK. Almost all trades have to get recorded in the UK, whereas here it’s really just those that are subject to swaps regulations.”
In 2013, the U.S. Commodity Futures Trading Commission started enforcing an oral auditing provision, which required most banks to start recording their trading floors. Many of the European banks have recorded the trading floor for consistency irrespective of geography from Singapore, New York to London, according to Miller.
“Obviously, European and UK banks have been call recording for a long time,” he said. “For most American banks call recording was new, and although voice recording and call recording sound very simple, it has to also be disaster recovery proof and required lots of time, effort, and investment.”
Some of T-Ware’s customers have been taking a wait-and-see approach, while other have “decided to manage by policy up to now,” said Miller. “Then there are others again that looked at some things like the FX scandal and Libor and other wrongdoings that happened in their business, some which may be more public than others, and have decided to implement surveillance programs.”
More forward-looking institutions have decided to go beyond regulations to survey all communications on the trading floors. Many devices and equipment on the trading floor are locked down, as are PCs and mobile devices. “Many of them are still using Blackberry because they are considered more secure,” said Miller. “A lot of them have actually implemented ‘BYOD’ and are implementing mobile device management to control those devices. Of course traders, want to use just one device for business and personal.”
The use of mobile devices for both business and personal communications presents a host of compliance issues.
“A lot of the banks are saying, ‘We need to give our traders the ability to use this device, but we need to make sure that we’re not caught up with billion dollar fines or loss of reputation,’” said Miller. “They are looking at the fiscal equation and the cost of somebody potentially doing something wrong rather than spending, what is in comparison, a small amount of money on analytics of the data that they capture from communications on the trading floor and for mobile phones.”
Featured image via Dollar Photo Club
State Street said the regulatory path would involve more delays, and all approvals have not been resolved.
Saphyre’s AI platform allows data to be entered once for simultaneous access.
Upgrades enable hedge funds and asset managers to gain actionable insights quicker and more efficiently.
They will help investors identify companies committed to improving gender diversity.
Investors are seeking the tax efficiency, trading flexibility and cost benefits of ETFs.