Secure Instant Messaging Replaces Squawk Boxes in Trading Rooms

ePulse, LONDON, UNITED KINGDOM – ePulse has released ePulse Messenger, a secure instant messaging platform that supports trading between financial institutions including the buy side, sell side and brokers. It provides a secure, real-time trading facility, which complies with the evolving requirements of the regulators and supervisory authorities. ePulse Messenger was developed in close cooperation with one of the industry’s largest brokers.

According to the Head of the Energy Trading desk at a major broker, “Instant messaging has become a business necessity. Today we would be severely disadvantaged without it. With ePulse Instant Messenger we can send 3-4 updates a minute to all our clients simultaneously, impossible with voice alone. ePulse Instant Messenger enables us to communicate with our clients regardless of the instant messaging platform they use. Today we provide these clients with a better service with fewer staff. ePulse Instant Messenger is far more cost effective than using one of the less reliable “free” services and having to purchase a separate audit logger for compliance.”

“The ability to easily negotiate pre-trade pricing and the structure of trades with a broad community of clients is very powerful. It’s a far more sophisticated tool than the old squawk boxes!” said Barry Patel, Director of Sales and Marketing at ePulse. Furthermore “ePulse Messenger provides comprehensive functionality for traders to communicate via all common instant messaging channels (including Reuters, Yahoo, AOL, ICQ and Microsoft) using groups, broadcasting and conferencing facilities with a common user interface. It improves efficiency across front, middle and back office processes, including position keeping and reconciliations. Full audit trail and management reports are included”, he continued. ePulse Messenger is available as an in-house message server or via an application service provider.

A recent survey of UK Financial Institutions suggests that while Instant Messaging is widely used as a communications tool, most organisations have limited policies for monitoring and controlling usage.

The National Association of Securities Dealers (NASD) and the Securities and Exchange Commission (SEC) have announced plans to monitor the use of Instant Messaging, amid fears that the technology might be used to violate rules governing trading processes and risk management. They have issued a Notice to Members indicating that brokers and traders need to begin archiving their IM records in much the same way that they do presently for e-mail correspondence. Specifically, the notice indicates that electronic communications are subject to NASD Rules 3010 and 3110, which collectively govern internal oversight of employee communications and records retention policies. By making an official Notice, the NASD is placing the onus on its more than 5,000 members to ensure they have upgraded their systems to archive the instant messages flowing across their networks. Members are advised to evaluate instant messages according to their "content and audience" in much the same way they currently do for written and electronic correspondence.

John Cant, a Director of Brewin Consulting, comments “Instant messaging will play a major role in all areas of the trade cycle from pre-execution through to settlement. For example, being able to capture pre-trade negotiations via a flexible, yet auditable, channel should help improve levels of STP by capturing data in a more structured way even before the deal is done.”

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