NYSE, NASD Propose E-Communication Guidelines

By Brian Prince  |  Posted 06-15-2007

The New York Stock Exchange and NASD have proposed new guidelines to help companies supervise and review electronic communications.

The 12-page document, released June 14, is the result of work by a committee that included representatives from securities firms.

"Technological innovations in the area of electronic communications have altered how people deliver, receive and store communications," the report reads. "These innovations have brought…new challenges to members in the establishment of supervisory systems and procedures for electronic communications that are reasonably designed to achieve compliance with applicable federal securities laws and self-regulatory organizations. With these challenges in mind, the NYSE and NASD are issuing this guidance for members to consider when developing such systems and procedures."

Among the highlights: Companies should review and supervise any communication between employees and customers made through non-company e-mail, such as Web-mail; they should have policies relating to message boards and e-faxes, and should clearly delegate who is responsible for reviewing the communications.

Securities firms have always been required to supervise communications, NYSE spokesperson Scott Peterson said. In the past, this meant double-checking letters, and about 10 years ago, it was a matter of doing that and keeping track of e-mails, he said.

"Now it's even more difficult because you don't have just e-mail, you have all sorts of new communications forms that people use," Peterson said, citing blogs and text messages as examples.

In the past, some people have expressed concerns that strict regulation of electronic communications may hamper their ability to do business in a world of BlackBerrys, e-Faxes and the like. However, Peterson said the document only includes recommendations and will ultimately help companies meet existing regulatory requirements.

"We are essentially giving guidance to the industry as to how they can comply…in this brave new world of technology," he said.

The public comment period for the guidelines lasts until July 13.

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