FINRA issued Regulatory Notice 11-32 in July, providing additional guidance regarding reporting requirements under Rule 4530, which became effective on July 1, 2011. The requirements of Rule 4530 are based on existing requirements in NASD Rule 3070 and Incorporated NYSE Rule 351, but Rule 4530 “strengthens, clarifies and extends these existing requirements.”

FINRA Rule 4530 requires member firms to:

• Report to FINRA certain specified events and quarterly statistical and summary information regarding written customer complaints
• File with FINRA copies of certain criminal actions, civil complaints and arbitration claims

Written customer complaints caught our attention, especially after further review of Regulatory Notice 11-32. Constructed as a Q&A, the seventh question of 11-32 asks: “Are text messages and tweets received from member firm customers complaining about the member firm or its associated persons subject to reporting under FINRA Rule 4530?“

Short answer: yes.

“FINRA Rule 4530(d) requires that a member firm also report quarterly statistical and summary information regarding written customer complaints that have been received. Received text messages and tweets are in a written format. Thus, a member firm must report text messages and tweets received from firm customers expressing complaints about the firm or its associated persons consistent with the requirements of FINRA Rules 4530(a)(1)(B) and 4530(d).”

As we’ve blogged about recently, FINRA has social media on its agenda and recently penalized a rep over Twitter misuse (among other infractions).

While text/mobile messaging may not garner the attention that social media has, new smart phones and their messaging platforms have compliance departments’ attention. More than 80% of respondents in a recent compliance survey from Smarsh acknowledged that regulatory obligations do require their firms to supervise and preserve mobile messages. While the vast majority of respondents acknowledged the importance, only 28% of respondents actually had procedures in place to preserve and supervise mobile messages.

In addition, Regulatory Notice 11-39 goes into further detail about mobile devices and their role in compliance. Specifically, FINRA states they must be considered and much like email, firms are required to “retain, retrieve and supervise” business communications from both company-issued AND personal devices.

FINRA is taking action and now addressing emerging technology. Are mobile devices included in your firm’s compliance policy?