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| 2003
News and Press Releases |
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HEADLINE:
NASD Advises Brokers To Monitor Instant Messages
By: Laura MacInnis - Reuters
Forbes.com. June 18, 2003
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EXCERPT: A securities industry watchdog on Wednesday told brokerage firms they should monitor employees' instant messaging the same way they do e-mail and written correspondence in order to ensure compliance with U.S. market regulations. The National Association of Securities Dealers said companies should retain copies of all instant messaging exchanges between brokers and customers for at least three years, as is required for e-mail. If a company cannot adequately supervise the instant messaging exchanges, the NASD recommended it prohibit employees from using the technology to communicate with customers. E-mails provided fundamental evidence in a recent probe of biased company research by financial analysts. Ten top U.S. banks paid $1.4 billion to settle the investigation by securities regulators. Instant messaging technology, such as Microsoft Corp.'s (nasdaq: MSFT - news - people) MSN Messenger and AOL Time Warner's (nyse: MSFT - news - people) AIM, allows users to exchange notes in real-time. The Securities and Exchange Commission requires retention of copies of e-mail and paper correspondence between brokers and their clients under its Rule 17a-4. Although the SEC does not explicitly refer to instant messaging in its communications rules, the NASD said firms should treat e-mail and messaging with the same vigilance.
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