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Instant Messaging – SEC Regulations Likely

According to the TowerGroup (Bank Technology News, January 2004), an estimated 15 percent of the securities industry in North America uses Instant Messaging for sharing market-related data with client. As we mentioned in our July 2003 issue, the NASD is already requiring member firms to retain records of instant messages for at least three years, and is requiring them to supervise the use of instant messaging technology by their employees. It is likely that
SEC regulations will emerge specifically on the subject this year or next year at the latest.

In the meantime, most securities dealers are choosing to be safe rather than sorry, and are attempting to apply the same rules they have for e-mails to instant messages as well—although the technology isn’t going to make that chore easy. Stay tuned.

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For the Record

The best Court Order in recent years can be found in the Citizens Coal Council v. Babbitt case (Civil Action No. 00-0274 (D.D.C. May 2, 2001)):

The recent heated exchange between plaintiffs and intervenor on the subject of whether or not the [National Mining Association] should have filed a statement of material facts pursuant to Rule 56.1 or not, whether the Court has granted plaintiff’s motion for leave to file supplemental authority or not, whether the Court’s own previous order is “authority” or not, etc., betrays a startling lack of sense of humor, or sense of proportion, or both, especially since it appears to be agreed that the facts relevant to this case are all in the administrative record. It is…ORDERED that NMA’s Rule 56.1 statement is not “rejected,” that it will remain of record, and that it may remain as “context” for NMA’s arguments. And it is FURTHER ORDERED that the parties lighten up.