Electronic Recordkeeping in the Era of Mobile Devices: Staying Ahead of FINRA and SEC Regulations

Electronic communications are critical in meeting customers' needs and facilitating securities transactions. However, employees can violate electronic recordkeeping requirements without the appropriate controls and technology.

Given the likelihood of ongoing regulatory enforcement and fines, compliance with the recordkeeping requirements, including the 1934 Securities Exchange Act and the 1940 Investment Act, must be a top priority for financial institutions.

The fines and penalties associated with recordkeeping violations can provide an unnecessary source of embarrassment, which can be particularly damaging when trust is such an important factor in financial markets. Enforcement activity can also compel financial institutions to hire additional compliance staff to mitigate the risk. And while harder to observe and quantify, attracting regulatory oversight can impact a financial institution’s reputation and stock price.

Simply put, non-compliance can be costly and distract an institution from its primary mission.