Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


09:15 PM
Connect Directly

To Be or Not to Be an IM Shop?

Financial-services firms are divided when it comes to allowing instant messaging. Many warn they don't have a choice.

When it comes to instant messaging, Charles Bennett has his doubts.

As vice president of compliance at broker-dealer Hornor, Townsend & Kent, it's Bennett's job to make sure his firm complies with SEC and NASD rules governing electronic communications. Although HTK recently deployed technology to manage e-mails across its multiple locations, when it came to instant messaging, the firm took a pass.

That's because people in HTK's technology group have concerns about rolling out the medium to its representatives and their clients, Bennett says.

HTK's main issue at the time of the decision, was security and the ability to properly capture and monitor IM traffic from multiple vendors. Bennett says HTK's technology department was worried that allowing external communications via the firm's servers would compromise the safety and integrity of its systems. Allowing clients to "pierce our firewall is not something we were prepared to do."

In addition, HTK decided the state-of-the-art technology that would ensure it could capture the messages accurately, wasnot yet available. The broker-dealer has a number of brokers working from remote offices, which Bennett believed made the proposition more complicated.

So for now, IM is a no go at HTK, but it's something that Bennett will continue to watch closely. He's not alone. Both sell-side and buy-side firms are grappling with instant messaging and if they're not, chances are they will be forced to deal with it soon.

1 of 6
Register for Wall Street & Technology Newsletters
Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.