Relay Recap by Global Relay

Welcome to Relay Recap, where we bring you the regulatory developments that have dominated the compliance landscape over the last month.

September saw the Securities and Exchange Commission (SEC) fines at its peak for a host of issues from recordkeeping failures, to violation of the Marketing Rule, to off-channel comms. In ensuring firms meet the rules set out by the regulator one thing is clear, there is a growing need for the application of zero-tolerance policies from the top.

‘Tone from the top’ is critical to ensuring employees follow policies and procedures to safeguard against off-channel communications and allow for proper data processes and controls. This is particularly topical this month, with a number of C-suite officials facing regulatory and legal consequences for non-compliance, as in the recent case of Swedbank.

What is becoming increasingly clear, is that it is paramount that financial services adopt solutions that capture newer avenues of communication such as voice and social media channels, in pursuit of venue completeness. There is also a growing need to cultivate transparent working cultures where senior officials demonstrate their compliance. In doing so, firms may circumvent potential cases of non-financial misconduct. Emma Parry 's newest edition of the ‘Conduct Chronicles’ delves into how firms can equip themselves to create a positive working environment, and how this directly establishes a culture of compliance.

Read below for our latest news and resources, giving you the information, you need for a successful compliant communications strategy.

Does the SEC action in September mean we can expect an autumn of fines?

The latest?instalments?of SEC fines have covered a plethora of compliance issues, and are indicative of a wider strategy by the regulator to tackle failings around capturing and preserving electronic communications within financial services. In the last month alone, we’ve seen enforcement action for off-channel comms issued to more than 40 firms across the gamut of financial services. Not only do financial services require stronger corporate governance, they must also operate transparently across all functions, including marketing messaging.

Read more about the various fines imposed within the SEC’s crusade in tackling off-channel comms:

• Nine firms fined $1.24 million for not playing by SEC's Marketing Rule
• By the dozen – SEC fines 12 municipal advisors $1.3 million for off-channel communications
• Another day, another SEC fine: The SEC charges six credit agencies $49 million for recordkeeping failures

Regulatory Wrap Episode 39: $49M in SEC Fines for 6 Firms

Watch to find out more: Episode 39 of our Regulatory Wrap series covers one of the large fines by the SEC this September

To capture or not to capture voice? That is the question

As regulatory focus on voice surveillance increases, firms no longer have a choice but to capture voice.?From the FCA’s action against BGC Brokers, to myriad fines from U.S. regulators for voice supervision failures, it is clear that voice solutions are no longer just ‘nice to have’. Here?it seems the benefits outweigh the costs, especially when the colloquial nature of real-time conversations is more likely to conceal instances of financial crime.

This month, we launched our latest voice solution, and explored the growing need for voice tools:

• Hold the phone – What are the voice recordkeeping requirements for firms?
• Regulators drop their mics in their quest to preserve voice comms
• Regulatory whispers forewarn U.S. swap dealers of voice surveillance focus
• 5 Tips to enhance voice surveillance
• How does voice surveillance differ from other forms of communications surveillance?

Global Relay’s latest AI-Enabled Voice Surveillance solution

Verbal communications are a known hotspot for misconduct and non-compliance, which is why Global Relay has launched its latest voice surveillance solution, to ensure firms can capture all channels in their pursuit of venue completeness. Voice surveillance solutions can mitigate the risk of gaps in firms’ communication records aided by AI-enabled voice-to-text transcription solutions.

Find out more here: Global Relay's AI-Enabled Voice Surveillance solution

The Conduct Chronicles – “Are we winning the Culture War?”

As the FCA continues to place emphasis on non-financial misconduct, such as workplace harassment, it is crucial that work environments facilitate a space for employees to speak up and out. Empowering individuals to do so, allows for a positive culture. Firms must understand that misconduct is not just financial, and policies that elevate inclusivity and diversity of thought are transformative for business progression and compliance.

Read the latest Conduct Chronicle: "Are we winning the Culture War?"

Don't miss out

• We're hosting a webinar setting out the critical need for voice surveillance tools. Click here to sign up now.
• The Office of Foreign Assets Control (OFAC) has published an Interim Final Rule (IFR) that will extend existing recordkeeping requirements for certain transactions from five to 10 years.
• The Office of the Superintendent of Financial Institutions (OSFI) released its final Guideline E-21 on operational risk and resilience, which outlines expectations for firms to prepare for and respond to disruptive events that could affect business operations.
• Citigroup’s Chief Operating Officer and Swedbank’s Chief Executive Officer are facing the repercussions of data reporting and controls failures.