Email Compliance

Written by Gregg Ruais
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Regulatory agencies such as the SEC mandate that brokerage firms archive and protect all email records. Failure to comply with SEC regulations can result in fines exceeding $10 million, and consistent noncompliance can result in the disallowance of trading activity. In 2002, several brokerage and mutual fund companies incurred massive fines, some of which were related to email retention.

Some email compliance laws have been around for many years. Over time, however, the regulations became akin to the 55 MPH speed limit; the rules had been written, but nobody listened to them, and the enforcement agencies only prosecuted the worst offenders. Companies took advantage of the SEC's flexibility, and problems eventually got out of hand. The SEC realized it had to make examples of some companies in order to regain control of the industry. It accomplished its goal, sending nearly every securities company scrambling for solutions on how to comply with regulations.

The Urgency of Email Compliance

Fearing reprimand that would most definitely make the evening news and all the newspapers, financial services companies came up with fast solutions. Today, however, those same companies are exploring alternative methods to storing and protecting email records. Having corrected their noncompliance issues, businesses now want to operate more efficiently.

Ideally, company emails should be stored in one centralized location. Messages should be searchable for easy retrieval. Most importantly, emails must be archived using software that disables the ability to alter any records. As with all businesses, securities companies need disaster recovery plans and backup to prevent the loss of mass data.


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