Navigating the expanding e-communications compliance perimeter discusses the challenges firms face in managing regulatory requirements for electronic communications. As the use of technologies like social media, mobile, and collaboration tools has grown, regulations have expanded to require retaining records of communications on these channels. However, many firms still have compliance gaps and do not properly retain and supervise content on all channels. The presentation recommends implementing policies and procedures, training, and technology that can archive, search, and enforce retention of electronic communications across multiple platforms. This will help firms address their expanding regulatory obligations as rules continue to intensify oversight of electronic communications.

1. Navigating the expanding
e-communications compliance perimeter
Ken Anderson
Vice President, Marketing

2. Today’s discussion items
Technology &
compliance at
a crossroads
The
landscape:
How are firms
managing?
The path
forward
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3. Every 60 seconds on the Web
Compare 2013 to 2015:
• Email
• WordPress
• Twitter
3
www.smartinsights.com
+12%
+48%
+51%

4. Proliferation of content in regulated industries
2000 2016
The diversity and complexity of
electronic communications being
used continues to grow year over year
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EMAIL
IM
SOCIAL
WEB
MOBILE
FILES
VIDEOS
VOICE/AUDIO

5. Regulatory oversight, today and tomorrow
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• FCA Final Guidance 15/4
Social Media & Customer
Communications (2015)
• The Markets in Financial
Instruments (MiFID) II (Jan. 2018)

6. Expanded governance & intensified scrutiny
• Records of all electronic communications and telephone
calls (fixed and mobile) retained for minimum of 5 years.
• Includes not just communications that conclude in a
trade, but all those calls and communications that are
intended to conclude in a trade.
• Electronic communications and telephone calls on both
privately owned and firm issued equipment need to be
retained, for both permanent and contracting staff.
Source: MiFID II Directive 2014/65/EU Article 16 (7)
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7. You need to be prepared to produce records:
• Email
• Phone call logs/recordings
• Instant message platforms
• Website content
• Mobile/text messaging
• Enterprise & personal social platforms
• Collaboration tools/files
The time of maximum need
69%
39% 36% 36%
25% 25%
0%
20%
40%
60%
80%
Most Common Electronic Message Types
Requested During Last Regulatory
Examination
Source: 2015 UK Compliance Survey
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8. The
Landscape:
How Are
Firms
Managing?
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9. How are firms managing?
The 2015 Electronic
Communications Compliance
Survey Report
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10. Allowance of social channels
has grown in financial firms…
Source: Smarsh Annual Compliance Surveys
(US FinServ orgs)
But a significant compliance
gap exists.
of US firms that permit
social do not have retention/
supervision in place.
39%
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Compliance beyond email

11. UK compliance gaps
Graphic mage
(with white background)
goes here
UK firms recognise value of social media,
allowing use for business
communication
of UK firms that permit social
do not have retention/
supervision in place.
73%
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• LinkedIn
• Twitter
• Mobile
~60%
60%
56%

12. Some observations on US vs. UK
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"...a member firm's obligations to supervise electronic
communications are based on the content and audience of the
message, rather than the electronic form of the communication.
Consequently...FINRA expects a firm to have supervisory policies and
procedures to monitor all electronic communications technology
used by the firm and its associated persons to conduct the firm's
business. To that end, a firm should consider, prior to implementing
new or different methods of communication, the impact on the
firm's supervisory system, particularly any updates or changes to the
firm's supervisory policies and procedures that might be necessary.”
FINRA Notice to Members 07-59, Dec. 2007

13. Timeline of US social regulatory scrutiny
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Jan. 2010 Aug. 2011
FINRA Regulatory Notice
10-06
Guidance on Blogs and
Social Networking
Websites
Jan. 2012
FINRA Regulatory Notice
11-39
Social Media Websites
and the use of Personal
Devices for Business
Communications
SEC National Examination
Risk Alert
Investment Adviser Use of
Social Media
July 2011
FINRA Quarterly Report of
Disciplinary Cases
: “…former rep of a Texas
firm is serving a one-year
suspension for a series of
violations, including failure
to inform her firm's principal
that she had a Twitter
account and sending more
than 30 tweets about
securities.”

14. The path
forward
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15. Challenge: Bringing order to the chaos
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16. The good news: you can…
use the latest digital
marketing apps and
channels AND stay
compliant.
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17. Stakeholder alignment in action
The Challenge
• Social organisation with an active adviser community
• FCA FG15/4 social media compliance
• Key driver: “Compliant business enablement”
• More communications empowerment = more business
productivity
• Preparation for MiFID II
Email, Bloomberg IM, Chatter, Corporate Twitter
page, Corporate Facebook page, SLACK
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18. Best Practices
Implement reasonable policies and procedures
STEP 2. Staff training
STEP 3. Technology for enforcement of retention/policy
Search Policies
Cases Admin
STEP 1
STEP 2
STEP 3
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19. Step 1: Implement polices & procedures
• Extend policies to encompass more
than email
• Policies need to address…
• Regularly review and add up-to-
date regulatory guidance to your
policies
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20. Step 2: Training
• Understand and document training
• Identify and deputise your SMEs
• Pre-approval vs. supervision/post-
review on social
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21. Step 3: Retention & enforcement technology
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MichaelSam
Matt
Eric
Jane• Broad range of content types
and versions across email, IM,
social, mobile, files and web
• Cloud-based or on-prem?
• Policy-driven compliance and
supervision
• Immutable retention
Comprehensive Archive Platform

22. • Ease the burden of monitoring
content across multiple channels
• Enable powerful search and case
management
• Implement retention policies so
content is stored as long as needed
• Apply legal holds to support
investigations or discovery events
A comprehensive archiving solution will…
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23. • Enforce your firm’s established
policies
• Automatically flag risky content
• Help you quickly take action and
remediate policy violations
• Provide an audit trail of all actions
taken incl. corrective actions
A comprehensive archiving solution will…
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24. Resources for your journey
Read at:
www.smarsh.com/whitepap
ers/uk-fca-social-media-
guidance-best-practices-for-
recordkeeping/
Read at:
www.smarsh.com/whitepap
ers/uk-preparing-for-MiFID-
II-and-MiFIR-recordkeeping
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25. Questions?

26. Thank you

27. Regulatory landscape
MIFID II Directive: firms must be in a position
to archive, supervise and disclose all their
electronic communications, including
telephone calls (fixed and mobile), from any
device, personal and business.
Financial Conduct Authority
Final Guidance 15/4 Social Media & Customer
communications
European Commission
JANUARY 3rd 2018 MARCH 2015
• Recordkeeping Minimum 5 years
• All-inclusive Not just communications that
conclude in a trade, but all
intended to conclude in a trade
• Recordkeeping Social media platforms
themselves not sanctioned
• Expansive Rules Governing supervision and
retention of social media
communications

28. Increasing Governance Challenges
• Variety Communications data generated by variety of apps, sources
and devices
• Volume Integration/API complexity
• Authenticity Maintaining context e.g. social media is commonly multifaceted;
Twitter post contain link to YouTube video
• Complexity Public social media archiving encompasses three different
approaches Portal Access, Proxy, API
Public social content: Facebook, LinkedIn, Twitter.
Business social content: Google Talk, Microsoft Yammer,
Salesforce Chatter. Websites. Text messages.
Messaging content types beyond email gaining regulatory scrutiny
The Challenges IT Challenges

29. Supported
content types
Email VideoSocial WebMobile Audio Files
Search Policies
Cases Admin
Core Platform Features
IM
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