Bloomberg Launches Compliance Product to Mitigate Chat Room Risk

Multi-dealer communication platforms, which are important features for financial terminals such as those from Bloomberg and Thomson Reuters, have come under greater compliance review recently. The scrutiny of the products occurs as global financial regulators, including the CFTC, FCA and FINMA, are investigating whether banks colluded with manipulating both FX prices and LIBOR rates. As a result, several banks, most recently JP Morgan and Deutsche Bank, have taken the initiative to ban the use of cross firm messaging products by their employees.

Affected by restrictions on the products are providers of such tools that integrate both financial services and messaging on one platform. Used by traders and analysts to connect on ideas with colleagues, they also provide an efficient way to share and learn about new ideas from connections at other firms.

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For Bloomberg, instant messaging between users has been a staple of its financial data and analytics platform since its inceptions. This has resulted in many professionals continuing to subscribe to the terminal as they move between firms as they aim to maintain their existing financial social network. However, for firms where bans are put in place, it could lead to the reevaluation of whether to maintain costly terminals if they don’t provide networking benefits.

Reacting to the worries about multi-dealer chat, Bloomberg has announced the launch of the Bloomberg Compliance Center for its terminals. According to the firm, subscribers send 200 million emails and 15-20 million instant messages per day. As a result, in a blog post about the new product, Bloomberg expressed that, “Recently, there has been discussion around the use of chat rooms, and our clients have expressed interest in more precise and reliable communication-related compliance tools.”

Aiming to provide a solution for compliance worries in regard to how firms are monitoring cross-firm conversations, Bloomberg announced that the Compliance Center centralizes the firms existing compliance tools into a single location which contains “administration, monitoring, search, and retention capabilities designed to give a comprehensive, real-time view into firm-wide communications.”

According to Bloomberg, the Compliance Center will provide authorized users access to real-time chat monitoring, ability to invoke keyword exceptions to block messages containing specific language or topics, administration rights to disable anonymous chats, chat room participation reports, and messaging search tools. Bloomberg added that it was also developing “stronger reporting capabilities and permissioning tools that enable authorized firm administrators to better manage multi-party chat room participation.”