{"id":6681,"date":"2024-08-01T16:29:36","date_gmt":"2024-08-01T20:29:36","guid":{"rendered":"https:\/\/solutionsreview.com\/backup-disaster-recovery\/?p=6681"},"modified":"2024-08-02T15:37:54","modified_gmt":"2024-08-02T19:37:54","slug":"2024-so-far-recordkeeping-revamps-and-regulatory-rigor","status":"publish","type":"post","link":"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/","title":{"rendered":"2024 So Far – Recordkeeping Revamps and Regulatory Rigor"},"content":{"rendered":"

\"\"<\/p>\n

MirrorWeb’s Harriet Christie offers insights on recordkeeping revamps and regulatory rigor with a look at 2024 so far. This article originally appeared on Solutions Review’s Insight Jam<\/a>, an enterprise IT community enabling the human conversation on AI.<\/strong><\/em><\/p>\n

The typical narrative is that as time passes, digital regulation becomes more stringent. Accountability becomes a greater requirement as technology continues to advance and occupy a more meaningful proportion of our professional lives. There\u2019s nothing new here, and yet recent regulatory activity has been even more intense than expected across a variety of global organizations.<\/p>\n

Stateside, the Securities Exchange Commission (SEC) and the Financial Regulation Authority (FINRA) are continuing to demonstrate characteristic aggression while expanding the demands placed on firms under their jurisdiction. Meanwhile, in the UK, the Financial Conduct Authority (FCA) appears to have woken up from a period of relative indifference.<\/p>\n

FINRA<\/strong><\/h3>\n

FINRA\u2019s\u00a02024 Regulatory Oversight Report<\/a>\u00a0provided new steps for firms to implement in their quest for compliance. Companies are now asked what they are doing to capture business correspondence through off-channel avenues, and whether they are actively monitoring for new communications platforms that may be available to advisers.<\/p>\n

FINRA directly recommends that firms surveil if approved channels are underutilized, signifying that alternatives are being used. They\u2019re also asked to look out for \u2018indicia of communications occurring off-channel’, i.e. references to other conversations on unsanctioned domains.<\/p>\n

These updates are significant because of what they represent. Trusting employees to follow protocol is no longer enough – the surveillance element is now more pronounced, and compliance teams are expected to do the detective work to understand the regulatory landscape and make sure employee conduct is appropriate. This places a greater burden of responsibility across every organization, and makes it very difficult for leaders to look the other way and then plead ignorance.<\/p>\n

SEC<\/strong><\/h3>\n

Applying standards across the industry\u00a0<\/strong><\/h4>\n

We\u2019re all aware of the industry\u2019s ongoing probe into \u201coff channel\u201d communications, i.e. the WhatsApp fines, which have dominated headlines for a couple of years now. On April 3, 2024, the SEC\u00a0announced<\/a>\u00a0its first enforcement action against a registered investment adviser (RIA) with no ties to a broker-dealer.<\/p>\n

This action is a statement of intent – it exemplifies Enforcement Director Gurbir Grewal\u2019s desire to apply fundamental standards across the industry, and not just to the eye-catching JP Morgans of this world. This is not a box-ticking exercise, but a shift to the \u2018culture of proactive compliance<\/a>\u2019 that he strives for.<\/p>\n

Self-Reporting\u00a0<\/strong><\/h4>\n

Following criticism around arbitrary enforcement, the\u00a0SEC has denied<\/a>\u00a0that it is \u2018picking numbers at random\u2019 when determining fines around off-channel communications. Rather than the size of a firm or scope of their misconduct, the most impactful factor is in fact whether a company has self-reported their violations.<\/p>\n

By providing an opportunity for companies to self-report on past lapses and establish the correct compliance procedures proactively in exchange for leniency, the SEC is clearly trying to expedite the process of cultural upheaval.<\/p>\n

Marketing Rule\u00a0<\/strong><\/h4>\n

The marketing rule signaled a regulatory evolution when it landed in late 2022. Consumer protection was at the top of the agenda, but it has taken some time for the regulator to bear its teeth on enforcement. We are now seeing some progress, with companies being held accountable for passing outlandish speculation as legitimate advice.<\/p>\n

In April the SEC\u00a0imposed $200,000 in fines<\/a>\u00a0over marketing rule violations. Five RIAs were charged, with all five accepting that they misled consumers by advertising model performance which they could not substantiate. GeaSphere LLC was hit with the heaviest penalty of $100,000.<\/p>\n

Another\u00a0Risk Alert<\/a>\u00a0was issued around this time, with the regulator addressing common marketing rule pitfalls like those mentioned above.<\/p>\n

\u201cThe findings point to numerous instances of noncompliance, ranging from unsubstantiated claims to misleading advertising tactics, raising concerns about the transparency and accuracy of information available to investors.\u201d<\/p>\n

FCA<\/strong><\/h3>\n

Historically, the FCA has developed a reputation for weak enforcement, particularly in comparison to its US counterparts. This\u00a0report<\/a>\u00a0from the National Audit Office (NAO) in December 2023 acknowledged that in order to match the UK government\u2019s ambitions for the sector, they would need to improve on past \u2018regulatory failures\u2019. In recent months, they have obliged.<\/p>\n

In November 2023, they issued a\u00a0call-to-action<\/a>\u00a0highlighting lapses around Consumer Duty compliance, including the promotion of high-risk or complex products, opacity on fees, and insufficient consideration of consumer understanding. The regulator also began to directly engage with noncompliant firms, conducting onsite visits and issuing Section 165 information requests.<\/p>\n

In March 2024, following a review into retirement income advice, the FCA\u00a0wrote to the CEOs<\/a> of financial firms and told them to review their processes. They also warned that \u2018the honeymoon period is over\u2019 around Consumer Duty enforcement and revealed plans to\u00a0publicly share details<\/a>\u00a0of any businesses under investigation.<\/p>\n

The \u2018name and shame\u2019 policy was met with\u00a0widespread backlash<\/a>\u00a0across the industry, including British Chancellor of the Exchequer, Jeremy Hunt. While unpopular, it signifies how unprecedented and potentially impactful the FCA\u2019s change of strategy can be.<\/p>\n

How Do Firms Keep Up?\u00a0<\/strong><\/h4>\n

As we can see from the three organizations highlighted above, it has been a particularly busy start to 2024 across regulatory compliance. It\u2019s easy to wonder when it all ends – if regulations are in a constant state of flux, is there really any point shooting at a perennially moving target?<\/p>\n

The answer is a resounding \u2018yes\u2019. Regulatory enforcement is on the rise across compliance, so there could be very real and expensive consequences for those who don\u2019t comply. Crucially, transparency is also on the rise. Regulators across global finance are being extremely candid and detailed about their expectations, and while those demands may be new and frustrating for many, at least firms know exactly where they stand.<\/p>\n

There\u2019s no ambiguity here. It would be foolish to ignore such precise instructions, and if that is what transpires, companies will only have themselves to blame.<\/p>\n","protected":false},"excerpt":{"rendered":"

MirrorWeb’s Harriet Christie offers insights on recordkeeping revamps and regulatory rigor with a look at 2024 so far. This article originally appeared on Solutions Review’s Insight Jam, an enterprise IT community enabling the human conversation on AI. The typical narrative is that as time passes, digital regulation becomes more stringent. Accountability becomes a greater requirement […]<\/p>\n","protected":false},"author":189,"featured_media":6722,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[1313,1314],"acf":[],"yoast_head":"\n2024 So Far - Recordkeeping Revamps and Regulatory Rigor<\/title>\n<meta name=\"description\" content=\"MirrorWeb's Harriet Christie offers insights on recordkeeping revamps and regulatory rigor with a look at 2024 so far.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Harriet Christie\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/\",\"url\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/\",\"name\":\"2024 So Far - Recordkeeping Revamps and Regulatory Rigor\",\"isPartOf\":{\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/files\/2024\/08\/8-11.jpg\",\"datePublished\":\"2024-08-01T20:29:36+00:00\",\"dateModified\":\"2024-08-02T19:37:54+00:00\",\"author\":{\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/#\/schema\/person\/8a58ac49c00b97bde5a52e29af7edd3f\"},\"description\":\"MirrorWeb's Harriet Christie offers insights on recordkeeping revamps and regulatory rigor with a look at 2024 so far.\",\"breadcrumb\":{\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/#primaryimage\",\"url\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/files\/2024\/08\/8-11.jpg\",\"contentUrl\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/files\/2024\/08\/8-11.jpg\",\"width\":786,\"height\":393},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/2024-so-far-recordkeeping-revamps-and-regulatory-rigor\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"2024 So Far – Recordkeeping Revamps and Regulatory Rigor\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/#website\",\"url\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/\",\"name\":\"Best Backup and Disaster Recovery Tools, Software, Solutions & Vendors\",\"description\":\"Solutions Review\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/#\/schema\/person\/8a58ac49c00b97bde5a52e29af7edd3f\",\"name\":\"Harriet Christie\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/files\/2024\/01\/Harriet-Christie.jpg\",\"contentUrl\":\"https:\/\/solutionsreview.com\/backup-disaster-recovery\/files\/2024\/01\/Harriet-Christie.jpg\",\"caption\":\"Harriet Christie\"},\"description\":\"Harriet was appointed Chief Operating Officer in 2020. 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