Executive summary
This Compliant Communication Report is the first in a series of annual reports by Global Relay, which serves as a litmus test for market responsiveness to regulatory action for recordkeeping and communications compliance.
In January 2023, Global Relay asked our network of compliance officers to complete an anonymous survey regarding their management of communication channels and devices. The survey generated responses from compliance officers across the gamut of regulated industries, though principally focused on financial services.
Almost half of the respondents were located within the United States, with around 30% from the United Kingdom. The remaining respondents were from European Union countries and rest of world.
The survey comprises eight questions. Since it was compiled, we have seen continued regulatory developments, including landmark enforcement action and new regulatory proposals.
The survey pre-dated news that some firms have looked to dock the bonuses of non-compliant employees, and before the U.S. Department of Justice announced that it would look at compensation structures in its consideration of criminal investigations that involved uncaptured communications.
From the U.K. Financial Conduct Authority’s (FCA) Handbook SYSC 10A to MiFID II and FINRA Rule 3110, regulations surrounding the capture, monitoring, and surveillance of digital communication channels are far-reaching and robust. However, while regulatory obligation is not new, many firms have yet to implement clear strategies to manage ever-evolving communication options, nor how to capture them all.
This was made clear in December 2021, when J.P. Morgan Securities received a $200m fine for widespread and longstanding use of unrecorded eCommunications including text, personal emails, and WhatsApp.
Today’s actions – both in terms of the firms involved and the size of the penalties ordered – underscore the importance of recordkeeping requirements: they’re sacrosanct.
Gurbir Grewal, Director, SEC Division of Enforcement
As we stand now in 2023, we are in the midst of a compliant-communication crisis, with regulators and financial institutions struggling to keep up with the pace of innovation, and regulated industries battling to manage evolving regulatory expectations.
This report explores the current landscape to understand how firms are reacting, the challenges they face, and the steps they will need to take to comply in the future. What is the solution for compliant communications?
