WhatsApp clampdown highlights video call compliance threat for finance firms

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With text messages and emails under tightened surveillance, financial firms may now have to screen staff video calls for possible rule-breaking, amid concern regulators are poised to scrutinise such calls for compliance breaches.

So far, a sector-wide crackdown led by the U.S. Securities and Exchange Commission has focused on business-related text messages over unauthorised platforms, such as WhatsApp, which went untracked and unrecorded by regulated firms, largely during COVID-19 lockdowns when thousands of employees were working from home.

But Matthew Nunan, a partner at law firm Gibson, Dunn & Crutcher, and former EMEA head of conduct risk at Morgan Stanley"If client calls are held over Microsoft Teams, then would expect these to be captured. The issue is the ability of firms to record, retain and produce relevant business records, however they are made," he said.

At least two major global banks are now recording Zoom calls, said sources with knowledge of the matter, who declined to be named because the information is not public. FINRA declined to comment on how many firms were subject to the rule or whether the rule also extended to video calls.

 

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