The Financial Industry Regulatory Authority (FINRA) regulates member firms in the Financial Services Industry which can include Banks and Insurance Companies. The following are several regulations that apply along with how Sprint Multiline can assist companies in meeting FINRA Compliance.
SMS Text Recording Requirements
FINRA Regulations 11-32 States that tweets and text messages are written material which need to be preserved for reporting purposes:
FINRA Rule 4530(d) requires that a member firm also report quarterly statistical and summary information regarding written customer complaints that have been received. Received text messages and tweets are in a written format. Thus, a member firm must report text messages and tweets received from firm customers expressing complaints about the firm or its associated persons consistent with the requirements of FINRA Rules 4530(a)(1)(B) and 4530(d). For example, if a firm customer sends a tweet to the firm alleging that an associated person sold him unsuitable securities, the firm must report it pursuant to FINRA Rule 4530(d).?
In addition, all member firms must maintain all correspondence in accordance with the record-keeping requirements of FINRA Rule 3110.09 which includes electronic communications such as email and text messages.
Sprint Multiline Solution: We provide the ability to capture and record SMS text messages on Corporate Owned or Personally Owned Devices. The messages can be securely transferred to the customer or a third-party firm for archival and discovery.
Use of Personally Owned Mobile Devices
FINRA 11-39 Establishes the requirement to retain, retrieve, and supervise business communication, even when that communication is conducted from a personal device:
Q14: May associated persons use personal communication devices and other equipment, such as a smart phone or tablet computer, to access firm business applications and perform business activity if the firm employs technology that enables the firm to keep records and supervise the activity?
A14: Yes. Firms may permit their associated persons to use any personal communication device, whether it is owned by the associated person or the firm, for business communications. FINRA recognizes that the development of new technologies can facilitate the ability of associated persons to perform their responsibilities and, in the case of registered representatives, to serve their clients. Of course, the firm must be able to retain, retrieve and supervise business communications regardless of whether they are conducted from a device owned by the firm or by the associated person.
In order to ensure that the business communications are readily retrievable without necessitating the capture of personal communications made on the same device, firms should have the ability to separate business and personal communications, such as by requiring that the associated persons use a separately identifiable application on the device for their business communications. If possible, this application should provide a secure portal into the firm’s own communication system, particularly if confidential customer information may be shared. If the firm has the ability to separate business and personal communications, and has adequate electronic communications policies and procedures regarding usage, then the firm is not required to supervise the personal emails made on these devices. Of course, firms also are free to treat all communications made through the personal communication device as business communications.
Sprint Multiline Solution: As per FINRA guidelines, Sprint Multiline is a separately identifiable application on a mobile device that separates business and personal use while also providing a secure management portal. Unlike many competing solutions that capture voice and text conversations at the network level, Sprint Multiline only captures voice and text conversations via the Application. As result of this design, business and personal communications are entirely separate and there is no way for Sprint to capture voice and text communications that take place on the personal side of the mobile device.
Requirement for Recording of Telephone Conversations
Note: This is not a requirement for all FINRA regulated member firms, only those that have been subject to disciplinary action and meet certain criteria.
FINRA 3170 – Tape Recording of Registered Persons by Certain Firms:
(b) Supervisory Procedures Regarding the Tape Recording of Conversations
(1) Each member that either is notified by FINRA or otherwise has actual knowledge that it is a taping firm shall establish, maintain, and enforce special written procedures for supervising the telemarketing activities of all of its registered persons.
(2) A taping firm required to establish, maintain, and enforce special written procedures pursuant to this paragraph must establish and implement the procedures within 60 days of receiving notice from FINRA or obtaining actual knowledge that it is a taping firm.
(3) The procedures required by this paragraph shall include procedures for tape recording all telephone conversations between the taping firm’s registered persons and both existing and potential customers and for reviewing the tape recordings to ensure compliance with applicable securities laws and regulations and applicable FINRA rules. The procedures must be appropriate for the taping firm’s business, size, structure, and customers, and shall be maintained for a period of three years from the date that the taping firm establishes and implements the procedures.
(4) All tape recordings made pursuant to the requirements of this paragraph shall be retained for a period of not less than three years from the date the tape was created, the first two years in an easily accessible place. Each taping firm shall catalog the retained tapes by registered person and date.
(5) By the 30th day of the month following the end of each calendar quarter, each taping firm subject to the requirements of this paragraph shall submit to FINRA a report on the taping firm’s supervision of the telemarketing activities of its registered persons.
Sprint Multiline Solution: We provide the ability to capture both SMS text messages and Voice Conversations on Corporate Owned or Personally Owned Devices.
Summary of FINRA Disciplinary Action, Letter of Acceptance, Waiver and Consent for a $1.5 Million Fine against member firm SunTrust for Failure to Retain Electronic Records, including SMS Text Messages:
FINRA jurisdiction over the investment professionals and firms that sell
variable life and variable universal life products:
Monthly FINRA Disciplinary Actions:
Disciplined Firms Under FINRA Taping Rule:
(FINRA Rule 3170 ? failure to tape record conversations):
FINRA Broker Check (search by Firm Name or Broker Name):