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Regulatory Perspectives

Blog: FINRA and SEC Set Out Supervisory Expectations on Communications Compliance

By January 24, 2024No Comments

2024 isn’t even a month old and already two U.S. regulators have updated their expectations on communications compliance. Firms need to be under no illusions – recordkeeping is, and will remain, a key regulatory focus.

Against a backdrop of $2.6bn+ fines and continuing enforcement action against both firms and individuals, U.S. regulatory expectations on communications compliance are continuing to evolve. Both the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) have updated their stance, approach and expectations as to good and better practice when it comes to communications compliance. U.S. firms in all sectors of financial services would be well advised to review and consider the updated supervisory approach.

FINRA Annual Regulatory Oversight Report 

The FINRA annual regulatory oversight report provides a comprehensive assessment of FINRA’s planned approach to supervision in 2024. Digital communications and associated compliance are a thread throughout the report with ‘off-channel’ communications a key supervisory focus. FINRA has defined the term “off-channel communications” as, in general, referring to business related messages sent and received through applications on personal devices or through other platforms outside of the member firm’s control, including using personal email, chats, or text-messaging applications for business purposes.

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