Have you ever heard of the Dodd-Frank Wall Street Reform and Consumer Protection Act? This act was implemented in July 2010, and it has instigated a fundamental shift in financial services regulation within the United States.
Across the globe, laws and regulations have governed all industries and companies, and the finance industry is probably under the most scrutiny of them all. Think about it: email communication is now the mainstay in every office, and compliance has grown in importance along with it. Banks and other kinds of financial institutions are taking record keeping and email archiving more and more seriously due to recent shake-ups in the industry.
Life Pre Dodd-Frank Act
Before the Dodd-Frank Act, regulations already required financial services firms to archive all data relating to specific business transactions and financial activities. By examining these records, the financial regulators were able to carry out their work: determining if a specific firm or employee had violated any laws or regulations.
The specific regulations like FINRA, SEC 17a-4 and others have always required financial services firms to prove their business is being conducted in the appropriate manner. These would have included requests similar to eDiscovery, with terabytes of data involved and a certain time frame set out for results to be provided.
Why Financial Firms Need To Wise Up
The difference between these compliance requests and modern compliance is that the search only focused on a specific department. The Dodd-Frank Act has a much broader scope, and regulators are no longer focused on specific issues or misdemeanors. The financial regulators are now ever vigilant in ALL aspects of a firm’s operations, in order to determine if they are a threat to the finance industry or even the economy.
There is only one way for regulators to achieve the required level of vigilance. They must continuously monitor the internal operations of all firms. To have full vigilance, regulators need access to internal email communications throughout the company. By ignoring the email archiving and compliance issue small financial firms are asking for trouble.
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