NASD Outlines Instant Messaging Rules For Members

by Glen Shapiro, LawAndTax-News.com, New York

23 June 2003

The National Association of Securities Dealers (NASD) on Wednesday issued a statement to its 5,300 members reminding them that instant messages sent by employees are subject to the same SEC requirements as e-mails, and that records must be retained for at least three years.

'NASD recognizes that instant messaging is becoming increasingly popular as a real-time method of communicating and we want to be clear about our expectations for its use," Mary L. Schapiro, NASD Vice Chairman and President of Regulatory Policy and Oversight explained, continuing:

'Firms have to remember that regardless of the informality of instant messaging, it is still subject to the same requirements as e-mail communications and members must ensure that their use of instant messaging is consistent with their basic supervisory and record keeping obligations.'

The regulatory body also advised that brokerage firms must supervise the use of instant messaging (IM) by their employees, a requirement which may cause problems, given that many of the products currently available for consumers do not lend themselves easily to monitoring.

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