UK firms could be the next to face greater regulatory scrutiny and fines for off-channel trading communications, according to a survey by Global Relay.
It found that 50% of industry professionals believe UK will soon face this rise in compliance. A further 31% of respondents anticipate action from the Financial Conduct Authority in the future, if not immediately followed by the SEC’s action.
This poll was conducted following the US’ Securities and Exchange Commission issued $1.24bn fines to Wall Street firms in 2022 for “pervasive off-channel communications”. Since then, Morgan Stanley has given penalties, ranging from thousands to millions of dollars, to its bankers that conducted official business on communications channels, such as WhatsApp.
Due to this, Global Relay urges firms to act now to mitigate the risk, as well as find a better solution than just banning the personal messaging platforms.
A report from SteelEye found that just 15% of financial firms are monitoring WhatsApp at all, despite rising levels of fines for communication monitoring failings.
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