Abacus Group, a provider of hosted IT solutions for hedge and private equity funds, is partnering with the cloud-based archiving and electronic e-discovery vendor Global Relay, to offer its clients a compliance service for the US Dodd Frank mobile recording and social media communication rules.
The Dodd-Frank rules require financial market participants to keep a record of their instant messaging (IM), mobile calls, social media missives and all other communications, as they would for land-based calls, aping similar rules already introduced in the UK to improve the surveillance and regulatory oversight of trading environments.
The enterprise-wide Global Relay archiving, e-discovery and retrieval system will be linked to the AbacusFlex private cloud platform run by Abacus, enabling its financial market end user clients to seamlessly integrate with the archive and monitoring platform as part of their final stage Dodd-Frank compliance exercises.
The major stage Dodd-Frank changes impacting prop trading, centralised repositories (with exchange traded derivative exemptions in the US) and so forth have all now been finalised. But much of the regulatory detail and marketplace alterations to the ‘ways of working’ are only now hitting trading floor practices and procedures - with physical changes to the way mobile trading communication is stored, recorded, monitored and retrieved only one example of the ‘front-end’ procedural challenges that demand back-end IT changes.
Dodd Frank recording rules
The Dodd-Frank Act requires that hedge funds, private equity funds and investment advisors retain and monitor all electronic messages. AbacusFlex clients’ will therefore be able to access Global Relay’s solution to cover their email, Bloomberg terminal, IM communications, mobile text messaging and call logs, and social media communications including LinkedIn, Twitter and Facebook - all of these comms channels will automatically be archived in the cloud.
The Global Relay service satisfies the US Securities and Exchange Commission (SEC) compliance requirements for message recordkeeping and supervision, such as SEC Rule 17a-4, and the link-up should mean Abacus clients will not have to undertake complicated internal compliance projects or invest heavily in data management, storage, security and business continuity overhauls. There will of course be an on-going fee, factored in, but this should still be cheaper than hiring and/or maintaining internal staff and launching internal enterprise document and e-discovery upgrade projects.
“In today’s challenging regulatory landscape, financial services firms must be able to store and access electronic business communications to remain compliant,” said Shannon Rogers, Global Relay President and general counsel, when commenting on the partnership with Abacus. “We are pleased to be able to provide these necessary tools to Abacus’ expanding customer base, enabling a growing community of hedge funds to comply with ease.”
According to Mark Kenney, director of operations at Abacus, the partnership should improve clients’ overall IT service experience. “We can now provide a more comprehensive offering,” he said, before adding that “the agreement also helps us streamline the launch process for new hedge funds, getting them up and running quickly with a complete IT infrastructure, including archiving for compliance, via Abacus’ private cloud.”
Rival cloud-based offering are of course available from Bloomberg Vault, Teleware and many others, but where clients are already signed up to existing platforms it is likely they will stay put if their platform provider offers them an easy compliance solution, as Abacus has done in this instance.