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LiveOffice Email Archiving & Compliance 201


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A 60-minute webinar presented by Core Compliance & Legal Services and sponsored by LiveOffice.

Once You Archive Email, What's Next?

When it comes to email compliance, preparedness is key.

View this crash course in email compliance, and find out what else you need to know to protect yourself and your business.

You'll learn:

- What you are required to do after you capture electronic data
- What SEC and FINRA rules apply to email
- What types of communications require email supervision and more

Published in: Technology, Business
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LiveOffice Email Archiving & Compliance 201

  1. 1. Email Compliance 201 Managing Captured Data Presented by Core Compliance & Legal Services, Inc. February 19, 2009
  2. 2. Introduction • Why This Is Important • Recap: “Electronic Communications 101: Fundamentals of Regulatory Requirements” • Where to Begin • Risk Area Categories Requiring Email Supervision • Rules of Thumb on Managing Captured Email 3 3
  3. 3. Why This Is Important • SEC and FINRA require investment advisers and broker-dealers to supervise business activities • Fiduciary duty/best interest of the client • Current regulatory climate/recent events • Trend toward more disclosure, transparency and due diligence 4 4
  4. 4. Recap: Regulatory Requirements For Broker-Dealers • Overview of FINRA rules – FINRA Rule 3010 Supervision – Securities Exchange Act 1934 17a-3 & 17a-4 – Notice to Members 07-59 • FINRA Expectations – Flexible risk-based approach – Content and target audience of the e-mail or IM – “Legible, true, complete, and current” records 5 5
  5. 5. Recap: Regulatory Requirements For Investment Advisers • Overview of SEC Rules – Investment Advisers Act Rule 204-2 • SEC Expectations – Risk-based approach – Have effective policies and procedures for electronic communication – Safeguard records from unauthorized access or destruction 6 6
  6. 6. Where to Begin • Review your firm’s customizable list of words and phrases • Recognize any areas of high risk which may require special attention – New hires – Heightened supervision of personnel – Communications between various departments within the business unit 7 7
  7. 7. Risk Area Categories Requiring Email Supervision • Performance Advertising and Marketing • Safeguarding Confidential Client Information • Anti-Money Laundering • Conflicts of Interest/Insider Trading 8 8
  8. 8. Performance Advertising and Marketing • Investment Advisers Act of 1940 Rule 206(4)-1 Advertisements by Investment Advisers – Prohibits fraudulent, deceptive, or manipulative advertising practices • FINRA Rule 2210 Communications with the Public – Prohibits false, exaggerated, unwarranted or misleading statements or claims 9 9
  9. 9. Performance Advertising and Marketing • Examples of what to look for: – Emails from sales discussing performance returns without disclosures or compliance approval – Inclusions of projections/predictions, testimonials and charts/graphs – References to any past specific recommendations – Balanced discussions of risk/reward 10 10
  10. 10. Safeguarding Confidential Client Information • Privacy of Consumer Financial Information (Regulation S-P) – Safeguarding confidential client information – Mandates privacy measures of all financial services firms • State laws govern – California SB1 Financial Information Privacy Act 11 11
  11. 11. Safeguarding Confidential Client Information • Examples of what to look for: – Social Security/Driver’s License Numbers/Birthdays – Emailed completed New Account Forms – Authorized recipients of sensitive and confidential client information – Client account information such as current income, assets, and investments 12 12
  12. 12. Anti-Money Laundering • Federal law requires financial institutions to develop and implement an Anti-Money Laundering (AML) Program which includes: – Policies and procedures and internal controls – Designation of an AML Officer – Annual independent testing of AML compliance – Ongoing employee training 13 13
  13. 13. Anti-Money Laundering • Examples of What to Look For: – Wire transfers information – Emails to and/or from client services or new accounts containing identifying information – Discussions of transactions involving off-shore or international accounts 14 14
  14. 14. Conflicts of Interest/Insider Trading • Insider Trading and Securities Fraud Act of 1988 • Remember: Investment Advisers and Broker- Dealers are required to act in best interest of the client 15 15
  15. 15. Conflicts of Interest/Insider Trading • Examples of what to look for: – Emails between the research analysts and the trading desk – Emails making recommendations and compensation arrangements for the benefit of the adviser/representative – Emails containing sensitive confidential information sent from the firm to a third party outside the firm 16 16
  16. 16. Rules of Thumb on Managing Captured Email • Spot and troubleshoot any loopholes – Too little data captured? Too much? • Ensure that your list of words and phrases fits the nature of the business (e.g., firm size, business activities) and keep the list confidential! • Verify that escalation procedures are being followed • Test the adequacy and effectiveness of back- up tapes/hard drives 17 17
  17. 17. Rules of Thumb on Managing Captured Email • Document the review—merely capturing/opening email is not enough! • Keep your email supervision system up-to- date and in compliance with the latest regulatory requirements • Devise a system to delegate and supervise email review if needed—keep in mind the supervisor maintains ultimate responsibility! • Take advantage of your third-party service provider for guidance 18 18
  18. 18. Questions? • Please contact us if you have any additional questions – Core Compliance & Legal Services, Inc. Tel: (619) 278-0020 Email: Website: 19 19
  19. 19. Email Compliance 201 R. Anthony Seyboth 2.19.09 No Hardware No Software No Waiting Slide 20
  20. 20. Overview: Experience The leading provider of email compliance solutions Who We Are What We Do Who We Serve  $22M in revenue  Archiving  20K successful audits  Founded in 1998  Compliance  99% client retention  Experienced team  Discovery  Fortune 100 clients  100+ employees  Continuity  Financial svcs focused  Profitable  Hosting  10,000 clients No Hardware No Software No Waiting Slide 21
  21. 21. LiveOffice AdvisorMail Difference • Automatically captures all sent and received messages Archive • Offers unlimited storage & retention • Protects messages in redundant data centers • Scans all messages for keywords & phrases • Provides random sampling of messages for rapid review Review • Comprehensive reporting features to satisfy requirements • Complies with state & federal requirements (SEC/FINRA/SRO) Comply • Offers end-to-end audit support • Provides peace of mind having passed 20K audits No Hardware No Software No Waiting Slide 22
  22. 22. LiveOffice Difference Meet Requirements Archive Review Comply Trust a 10,000+ Clients Proven Leader Worry Less Unlimited Storage, Guaranteed with Our Deployed in 5 Days, Guaranteed Guarantees 99.99% Uptime, Guaranteed No Hardware No Software No Waiting Slide 23
  23. 23. Thank You! Meet Trust Guaranteed Requirements R. Anthony Seyboth Director, Compliance & Litigation Services 800.374.2032 X 117 No Hardware No Software No Waiting Slide 24