Green Key Technologies Offers a Compliance Solution to the CFTC’s Rule 1.35

By Jill Sommers, July 28, 2016

One of the ongoing challenges faced by most market participants after many new rules and regulations have been promulgated over the last few years is how to capture, store, analyze and retrieve the vast quantities of data that are produced from daily communications. All major global regulators (from the US to Europe to Asia) have “record keeping” requirements, many of which have been expanded during the process of financial market regulatory reform. 

For example, the CFTC’s rule 1.35 requires the retention of voice, email, and instant messaging (IM) communication in a form and manner identifiable and searchable by transaction. In Europe, article 16(7) of MiFID II is similar.  

These record-keeping regulations have been the target of significant criticism.  The new rules are both broad in scope and greatly expand who is captured under the definitions. As a former regulator, I understand it is not always easy to strike a balance between following the mission of the agency and avoiding expensive and burdensome requirements.  It has taken many months and extensive dialogue between the CFTC and market participants to get 1.35 in the right place.  Compliance with 1.35 is now effective, and thankfully there are various new technology offerings coming to market that provide the required solutions without the need for changes in workflow.  

I have always been supportive of the power of technology to provide solutions to market challenges and to be used as effective tools to help market participants manage their regulatory risks.

To that end, I have been involved as an advisor to one such technology company, Green Key Technologies.  GreenKey is the voice-driven collaboration platform: enhancing compliance and enabling sophisticated data analytics.  They are working tirelessly to put tools into place to make it simpler and more cost effective for firms to comply with these new regulations being put into place globally.  These rules and regulations are here to stay.  GreenKey is helping to enable a paradigm shift in the economics and governance of financial markets communication.

GreenKey provides simple and cost effective solutions for some of the challenges facing firms, including:

  • Quotes and trades can be extracted as keywords from conversations using automatic speech recognition (ASR), and the recordings can be tagged to a particular transaction so that it isn’t necessary to sift through thousands of hours of recordings.
  • Using cutting edge ASR, conversations can be transcribed into usable text data in real-time with high accuracy, enabling search and analytics.  This allows compliance and surveillance teams to search in real-time. 
  • Using their IM Capture Tool, messages sent over IM platforms, such as Yahoo and WhatsApp, without retention features can be captured and stored.  This feature helps to promote a culture of compliance with financial firms.  
The data produced from daily communications continues to explode with the technological evolution of financial markets, and we need new tools to ensure that record-keeping is robust and effective. FinTech has the answer.

#regtech #fintech #recordkeeping #bigdata

About Jill Sommers:
Jill E. Sommers was nominated by both President George W. Bush and President Barack Obama, confirmed twice by the United States Senate and served two consecutive terms as a Commissioner of the Commodity Futures Trading Commission. She ended her six years of service on July 8, 2013. 

During her time at the agency, Commissioner Sommers was a consistent advocate for common sense regulation that included a thorough cost benefit analysis. In November of 2011, Sommers was named senior Commissioner with respect to MF Global matters, including overseeing the enforcement division’s investigation and ultimate filing of charges against both the companies as well as senior MF Global executives. Commissioner Sommers served as Chairman and Designated Federal Official of the Commission’s Global Markets Advisory Committee (GMAC), which discussed the regulatory challenges of a global marketplace. She also had the opportunity to represent the United States throughout the world working with regulators from over 100 countries as the Commission Representative to the Technical Committee meetings of the International Organization of Securities Commissions (IOSCO). 

Ms. Sommers has worked in a variety of capacities within the derivatives industry throughout her career, including as Policy Director and Head of Government Affairs for the International Swaps and Derivatives Association (ISDA) and Managing Director of Regulatory Affairs for the Chicago Mercantile Exchange. 

A native of Kansas, Ms. Sommers graduated from the University of Kansas and started her career in Washington in 1991 working for Senator Robert J. Dole (R-KS). She has continued her engagement with Members of Congress and federal regulators on a variety of financial and commodity industry issues over the past twenty-five years. 

Currently, she serves as a member of the Board of Directors and Chair of the Audit Committee for BATS exchanges, each a U.S. national security exchange owned and operated by BATS Global Markets, Inc., a Director on the Ethics and Compliance Initiative, a non-profit organization that empowers its members across the globe to operate their businesses at the highest levels of integrity, a member of the Advisory Board of Green Key Technologies, a technology provider of voice driven collaboration platforms for financial market participants, and as a senior advisor to Patomak Global Partners, a financial services consultancy group based in Washington, D.C. 

She and her husband Mike currently reside in the Washington, DC area and have three children ages 14, 13 and 12.