In recent years, the SEC, NASD and other authorities have vastly increased the volume and complexity of regulations with which financial industry participants must comply. Various regulations -- such as the SEC's prohibition of insider trading and NASD's limitation on gifts and entertainment -- require compliance officers to monitor electronic correspondence by employees of their firms. The proliferation of electronic correspondence as a method of communication has meant that manual monitoring has become all but impracticable. Bloomberg provides Real-Time Message Monitoring functionality that can assist a company in regulatory compliance.
Electronic correspondence via the BLOOMBERG PROFESSIONAL service, known as the "Bloomberg Message System," is one of the most commonly used tools in the financial community. Bloomberg Real-Time Message Monitoring functionality provides designated compliance officers the ability to track outgoing communications from Bloomberg user to Bloomberg user, Bloomberg user to Internet e-mail and INSTANT BLOOMBERG conversations, to ensure such communications are compliant with regulatory and corporate policy.
Bloomberg Real-Time Message Monitoring features a list of pre-defined policies to cover important areas of concern such as Information Boundaries, Insider Trading, Gifts & Entertainment, Restricted Lists and Information Security Labels. In addition, Bloomberg Real-Time Message Monitoring provides targeted monitoring functions such as Random Sample Review, keywords and phrases, together with the ability to run various searches and to maintain an audit trail for potentially offending communications.
Bloomberg Real-Time Message Monitoring can be applied at a firm-wide level, or even at the level of an account or a small group of Bloomberg users, enabling a designated compliance officer to capture, in real-time, any Bloomberg message or INSTANT BLOOMBERG communication that may violate a relevant regulation. Using advanced keyword functionality the system takes a proactive approach to surveillance by looking for words in specific combinations or contexts. In this way, for example, the system can detect a Bloomberg message that could trigger an insider trading or watch list violation, or an INSTANT BLOOMBERG communication that could cause a violation of a firm's gifts and entertainment policy.
Bloomberg Real-Time Message Monitoring provides a list of 30 pre-defined policies for a compliance officer to choose from. Once those policies are elected, the compliance officer has the ability to run various searches, which review the relevant communications and identify violations or potential violations of the policies. In addition to enhanced scope and precision, the system enables a compliance officer to maintain a clean and complete audit trail, which can be used to demonstrate to a regulator (for example, during an audit) that the compliance officer and his or her firm have been reading and tracking electronic correspondence, and, where necessary, escalating issues in accordance with the firm's policies and procedures.
One of the most unique features of Bloomberg Real-Time Message Monitoring is the ability to set up real-time warning alerts. Such an alert informs the sender that their electronic correspondence may contain language that violates an applicable policy or procedure, and advises the sender to consider revising the correspondence before sending it. This feature is especially useful for screening correspondence against restricted lists or watch lists, or in maintaining information boundaries between various sections of diversified firms. For example, a user can upload a restricted list, via the BLOOMBERG PROFESSIONAL service, and set the warning option so that every time a user writes a message including the name or ticker of a company on the list, the user will receive a pop-up alert. Similarly, larger firms with "ethical communication walls" can upload lists of employees on different sides of the wall, that is, employees who should not be communicating. The warning function will send such users an alert each time they try to communicate.
Bloomberg Real-Time Message Monitoring is used by a broad range of large and mid-size broker-dealers, hedge funds and their advisers and other investment advisers. Bloomberg also offers a Historical Self-Retrieval Tool, which enables a compliance officer to retrieve messages sent or received by particular Bloomberg users within a specified date range, and to download those messages directly from the BLOOMBERG PROFESSIONAL service.
To complement its electronic correspondence monitoring tools, Bloomberg's BLAW (Bloomberg Law) service, available to all users of the BLOOMBERG PROFESSIONAL service, provides legal, regulatory and compliance research functionality. BLAW includes full access to company news and information, Edgar filings, court dockets and opinions, and current awareness publications. BLAW users include CEOs, corporate counsel, compliance officers, and lawyers at firms of various sizes and specializations - all of whom are concerned about changes in securities laws and regulations, and how those changes impact the capital markets in which they operate. The pace of change in the regulation of capital markets has accelerated rapidly in recent years, and BLAW has enabled market participants to manage, monitor and remain proactive in a complex and shifting environment.
With recent legislation such as the Sarbanes-Oxley Act of 2002, which tightened public company auditing standards, to changes in the way in which companies report earnings and obtain listings on securities exchanges, laws, rules and regulations continue to impact the financial services industry. BLAW helps its users to stay abreast of the rapid changes in the regulation of capital markets.
BLAW users are able to track developments in securities regulation by using Bloomberg's "search and retrieve" functionality. BLAW enables users to access both new and historical securities cases, including shareholder derivative suits, securities class actions, administrative proceedings and enforcement actions. Similarly, BLAW allows users to track SEC rulemaking, no-action letters and other interpretive guidance, and news relating to private and regulatory actions. The BLAW securities and compliance applications have been developed with the interests of legal and compliance professional as both the goal and the guiding principle. The BLAW screen shot below illustrates the resources available to BLAW users.
For more information on Bloomberg Real-Time Message Monitoring or the various BLAW applications call 212-617-6569 or see: http://about.bloom-berg.com/about/professional/blaw.html .
Published June 1, 2007.