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Regulation Update: SEC cracks down on unrecorded communications
- June 1, 2024: Vol. 11, Number 6

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Regulation Update: SEC cracks down on unrecorded communications

by AdvisorLaw

The SEC is tightening its grip on financial communication, levying millions in fines for unrecorded conversations on text messages, chat apps and other unofficial channels. This has significant implications for RIAs who now need to archive all electronic communications — both internally and externally — to stay compliant.

The SEC is cracking down on undocumented communications, particularly those happening outside approved channels. This includes both public statements and internal discussions that touch on specific securities advice or instructions.

These communications must be archived as part of the firm’s records, aligning with the Advisers Act Section 204 and Rule 204-2(a)(7), which require RIAs to preserve all written communications related to investment recommendations, transactions and security orders. To ensure compliance, firms must establish clear policies, prohibiting the use of unapproved devices for business-related text messages or written communic

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