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SEC Focus on Communication Compliance

The ubiquity of smartphones and the surge in internet use have changed how most companies communicate with their employers, fellow employees, and customers. But this change became even more evident when the pandemic hit the world, and most businesses had to operate on a limited scale and adapt to a work-from-home environment. 

Today, modern communication tools such as Microsoft Teams, Zoom, Cisco WebEx, and the likes have been more utilized for remote collaboration. Moreover, instant messaging applications like WeChat, WhatsApp, Viber, and Telegram for work-related communications have also grown significantly. 

This new setup might have been advantageous for some, but it has also caused risks and safety threats for some businesses. With the rampant cybercrime concerns, this unprecedented digital communication growth has placed the confidentiality of many data and documents in jeopardy. These threats have motivated regulatory bodies such as SEC and FINRA to amend the existing communication compliance rules and introduce new regulations that will cover the requirements of hybrid working models, which include WeChat compliance and Telegram compliance.

These regulatory bodies have hastened their enforcement activities to ensure that firms have adequate monitoring and archiving system for their business-related communications. SEC has also emphasized that firms must adhere to broker-dealer record-keeping compliance without degrading the privacy of their employees. Failure to comply may result in paying huge monetary and non-monetary penalties.

For many years, social media platforms such as Facebook, Twitter, and LinkedIn emerged as practical business collaboration tools. FINRA then introduced that communication compliance should still cover business-related communication content in the said platforms. 

But today, most firms have ditched using social media for work-related communications and switched with more secure mobile messaging applications such as WhatsApp, WeChat, and Telegram. FINRA requires businesses to use these applications to capture voice calls, monitor text messages, and archive them in accordance with FINRA’s retention requirements. 

For more information on the updated communication compliance regulations and how businesses can avoid or face future SEC sweeps, you can continue reading on this infographic created by Telemessage.