Conducting Supervisory Reviews

According to FINRA Supervision Rule (3310), organizations must supervise all written business communications. With the increasingly large volumes of email communications sent and received every day, it can be difficult to regulate and monitor what your employees, customers, and other external stakeholders are saying. However, it is not necessary to review every communication as long as you have a process in place to review a sample. This helps to prevent a backlog of emails that need reviewing, which can become a serious problem.

Building a Lexicon

Rather than review 100% of email communications, it is helpful to develop a lexicon of keywords used in email communications. These keywords can include prohibited words (such as profanity), stock symbols, product and competitors’ names, or any word to alert you to potential problems.

Building a useful lexicon is a dynamic process which means you should periodically evaluate the quality of keywords to keep your lexicon relevant. Some tips to follow:

  • Make sure your keywords are in the languages that your employees use in every jurisdiction where you operate. For example, people operating in Latin America typically use Spanish so you should have primarily Spanish keywords in your lexicon.
  • Change your keywords based on events. For example, should Apple stock soar through the roof, you may wish to search recent past emails for “Apple”.
  • Include words that employees may use to circumvent some of your flagging rules. Examples include: TYOP (talk to you on the phone) TOL (talk offline), LDL (let’s discuss later) CMC (call my cell), or FON (phone) may be signs that a problematic conversation is being moved to a channel that is not being captured by your organization.
  • Reevaluate your keywords every six to twelve months.