Call Monitoring and Text Message Recording in Financial Sector – Latest NFA Regulatory Requirements Update

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The National Futures Association is an independent self-regulatory organization that is designated as a registered futures association by the Commodities Futures Trade Commission. The NFA regulates the futures and derivatives markets to protect their integrity and the investors, as well as ensuring that the members will fulfill their regulatory obligations, especially in areas of call monitoring and enterprise SMS archiving.

The increasing use of technology in the financial sector has motivated a continuously-evolving regulatory landscape. No business can remain competitive without taking advantage of twenty-first century communication channels.

The CFTC requires firms registered with them to be NFA members, and among them are Futures Commission Merchants, Introducing Brokers, Commodity Pool Operators, and Commodity Trading Advisors. The NFA’s members will use electronic communications to transact with their clients, and such data will need to be monitored.

Members’ Supervisory Procedures

The NFA expects its members to adopt supervisory procedures for call monitoring and enterprise SMS archiving for oversight purposes. Among the electronic correspondence to supervise are e-mails, instant messages, text messages, and others. A member’s methods can be adjusted depending on what is deemed appropriate to its business operations.

Generally, the procedures adopted must:

  • Be in writing
  • Identify the person responsible for the review by their position or title.
  • Specify the details on the electronic communication’s frequency and how they’ll be documented
  • Label the type of electronic communications that will be pre-reviewed or post-reviewed.
  • Specify the maintenance of the electronic communications and how they’ll be made available upon the NFA and the CFTC’S request.

Recording electronic messages is a must to explain a member’s business activities sufficiently. The recorded mobile messages must be retained in an orderly fashion as well as kept and maintained for five years. Complying with the NFA’s regulations will help combat fraud and abuse in the industry’s futures markets thanks to the combination of registration, rules, enforcement authority, and real-time market surveillance.

NFA’s Broad Rules

The various members of the NFA have different needs, and any strict regulations may not be suitable for some FCM, IB, CPO, and CTA members. The rules were written broadly to allow members to have flexibility in developing their supervisory procedures to meet their specific business needs.

NFA members have varying types, sizes, and complexities regarding the operations of their businesses. The different natures of their businesses warrant their varying circumstances so they can determine how they can comply with NFA’s regulatory requirements. It is not the NFA’s intention to restrict its members with a policy necessitating specific technological requirements.

The National Futures Association released an interpretive notice so that its members can understand that they’re given leeway on how they can comply with the requirements. What’s important is that NFA members can meet with NFA’s Compliance Rules. The United States already has various data protection laws set in place to protect a customer’s PII or Personally Identifiable Information, and seeking to comply with them can also result in compliance in NFA’s rules.

Compliance Rule 2-9 requires NFA’s Members and Associates to supervise their employees and agents in all facets of their commodity interest activities. The rule is broadly written to allow for flexibility for NFA’s members with an Interpretive Notice to guide them in establishing supervisory oversight of electronic communications.

Complying with NFA’s Mobile Archiving Rules

Each NFA Member is free to adopt specific procedures when reviewing and supervising electronic communications. Still, they must consider the nature of the conversation, the sophistication of the recipient, and the employees’ and agents’ training and background. Members must implement supervisory procedures that are designed to ensure that its agents and employees are only using authorized electronic communications systems for business purposes.

To ensure compliance, Members must have the capability to monitor business communications on the company’s official communications systems and their personnel’s devices. While Members can allow their employees to use their personal phones for business purposes and they must have the means to retain, review, and supervise the conversations held there to mitigate risks.

Achieving Compliance Through TeleMessage Mobile Archiver

NFA Members are to maintain records related to the conduct of their commodity interest business irrespective of the means of communication, whether e-mail, instant messages, text messages, or others. The content of the electronic communication determines whether or not it is subject to NFA’s recordkeeping requirements. Equipping members with a robust mobile archiving solution will ensure that all business-related communications sent through the employees’ mobile phones, regardless of whether it’s personal or not, will be retained.

The TeleMessage Mobile Archiver is a robust archiving solution that addresses compliance, regulatory, and eDiscovery response requirements. TeleMessage uses its own private cloud platform and stores data in SSAE-16 SOC2 certified hosting facilities. TeleMessage enables companies to better comply with the NFA call monitoring and enterprise SMS archiving requirements. TeleMessage captures and records mobile content, including SMS, MMS, voice calls, social media, and WhatsApp Chats from corporate or BYOD mobile phones.

Our mobile archiving products securely record content from mobile carriers and mobile devices for a variety of ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving solutions, you can always find the right tools or blend for your requirements:

TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website today at to try our mobile archiving products.

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