Perhaps one of the biggest compliance challenges facing registered investment advisors is how to create an adequate, reasonable, and enforceable policy surrounding electronic communications.

The archiving part is relatively easy and can be done with or without a third-party archiving service.  The usefulness of a third-party archiving service corresponds to the number of people in your firm.

Figuring out what policies your firm should have is the next level of complexity.  You can more easily determine what policies your firm should have if you figure out how you want to communicate the information to your firm.

You may want to structure your policies based on the specific type of electronic communication that is in question.  You can liken this to having policies based on the type of action.  For example, having sections in your policy documents that discuss email, social media, website pages, etc. as distinct units of communication.

“The medium is the message” as it has been said.

These are not the only considerations, of course, when defining policies for your firm.  Although the regulations are broad enough to allow investment advisers to formulate what is reasonable and adequate based on the business model and other factors, a crucial component of an effective compliance program is communicating the information in a way that is understand by those who are going to use it.

 

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