By Reuters | Updated: 18 August 2022
Asset managers are tightening controls on personal communication tools such as WhatsApp as they join banks in trying to ensure employees play by the rules when they do business with clients remotely.
Regulators had already begun to clamp down on the use of unauthorised messaging tools to discuss potentially market-moving matters, but the issue gathered urgency when the pandemic forced more finance staff to work from home in 2020.
Most of the companies caught in communications and record-keeping probes by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been banks – which have collectively been fined or have set aside more than $1 billion (roughly Rs. 8,000 crore) to cover regulatory penalties.
But fund firms with billions of dollars in assets are also increasing their scrutiny of how staff and clients interact.
“It is the hottest topic in the industry right now,” said one deals banker, who declined to be named in keeping with his employer’s rules on speaking to the media.
Reuters reported last year the SEC was looking into whether Wall Street banks had adequately documented employees’ work-related communications, and JPMorgan was fined $200 million in December for “widespread” failures.
German asset manager DWS said last month it had set aside EUR 12 million (roguhly Rs. 100 crore) to cover potential US fines linked to investigations into its employees’ use of unapproved devices and record-keeping requirements, joining a host of banks making similar provisions, including Bank of America, Morgan Stanley, and Credit Suisse.
Sources at several other investment firms – described in the financial community as the ‘buy-side’ – including Amundi, AXA Investment Management, BNP Paribas Asset Management, and JPMorgan Asset Management, told Reuters they have deployed tools to keep all communications between staff and clients compliant.
Spokespeople for the SEC and CFTC declined to comment on whether their investigations could extend beyond the banks, but industry sources expect authorities to cast their nets wider across the finance industry and even into government.
Last month Britain’s Information Commissioner’s Office (ICO), the country’s top data protection watchdog, called for a review of the use of WhatsApp, private emails and other messaging apps by government officials after an investigation found “inadequate data security” during the pandemic.
Good business for some
Regulations governing financial institutions have progressively been tightened since the global financial crisis of 2007-9 and companies have long recorded staff communications to and from office phones.
This practice is designed to deter and uncover infringements such as insider trading and “front-running,” or trading on information that is not yet public, as well as ensuring best practice in terms of treatment of customers.
But with thousands of finance workers and their clientele still working remotely after decamping from company offices at the start of the pandemic, some sensitive conversations that should be recorded remain at risk of being inadvertently held over informal or unauthorised channels.
Brad Levy, CEO of business messaging software firm Symphony, said concerns on managing that risk had driven a surge in interest for software upgrades that make conversations on popular messenging tools including Meta Platforms’ WhatsApp recordable.
“Most believe the breadth of these investigations will go wider as they go deeper,” Levy said.
“Many markets participants have retention and surveillance requirements so are likely to take a view, including being more proactive without being a direct target.”
He said Symphony’s user base has more than doubled since the pandemic to 600,000, spanning 1,000 financial institutions including JPMorgan and Goldman Sachs.
Symphony peer Movius also said its business lines specialising in making WhatsApp and other tools recordable have more than doubled in size in the space of a year, with sales to asset managers a growing component.
“Many on the buy-side have recognised that you can’t just rely on SMS and voice calls,” said Movius Chief Executive Ananth Siva, adding that the company was also seeking to work with other highly-regulated industries including healthcare.
Movius software integrates third-party communications tools such as email, Zoom, Microsoft Teams, and WhatsApp into one system that can be recorded and archived as required, he said.
Amundi, AXA IM, BNPP AM and JPMorgan Asset Management all confirmed they had adopted Symphony software but declined to comment on the full breadth of services they used or when these had been rolled out.
Amundi and AXA IM both confirmed they used Symphony services for team communications, while AXA IM also said they used it for market information.
Amundi, BNPP AM, and JP Morgan AM declined to comment on whether they thought regulators would seek to investigate record keeping at asset managers after enforcement actions against the banks were completed.
A spokesperson for BNPP AM said it had banned the use of WhatsApp for client communications due to compliance, legal and risk considerations including General Data Protection Regulation (GDPR).
© Thomson Reuters 2022
Apple Removes Russian Social Networking App VKontakte from App Store to Comply With Sanctions on Russia
By Agence France-Presse | Updated: 29 September 2022
Apple on Wednesday confirmed that it removed popular Russian social network VKontakte from its App Store globally due to sanctions imposed by Britain.
The British government on Monday sanctioned 92 Russian individuals and entities after President Vladimir Putin’s regime held referendums in Moscow-controlled areas of Ukraine – denounced by Kyiv and its allies as a “sham” – and stepped up threats against the West.
“Sham referendums held at the barrel of a gun cannot be free or fair and we will never recognize their results,” British Foreign Secretary James Cleverly said in a statement.
The sanctions target “those behind these sham votes, as well as the individuals that continue to prop up the Russian regime’s war of aggression,” he said.
San Petersburg-based tech firm VK said in a blog post that some of its applications were no longer available from the App Store, which serves as the lone gateway for content onto Apple mobile devices.
VK apps are used for messaging, digital payments, and grocery shopping as well as social networking.
The VK apps removed from the App Store were being distributed by developers controlled or majority-owned by parties sanctioned by the UK government, and Apple is complying with the law, according to the Silicon Valley tech giant.
Apple said that it terminated developer accounts associated with the apps, which were not available from the App Store regardless of users’ locations.
People who have already installed the apps on devices can still use them, but updates will no longer be provided through the App Store, according to Apple and VK.
“Their core functionality will be familiar and stable,” VKontakte-parent VK said of the apps.
“There may be difficulties with the work of notifications and payments.”
TikTok May Face GBP 27 Million Fine Over Potential Breach of UK Law, Failure to Protect Children’s Privacy
By Associated Press | Updated: 27 September 2022
TikTok could face a GBP 27 million (roughly Rs. 236 crore) fine in the UK over a possible breach of UK data protection law by failing to protect children’s privacy when they are using the video-sharing platform.
The UK Information Commissioner’s Office said Monday that it has issued the social media company a legal document that precedes a potential fine. It said TikTok may have processed the data of children under 13 without appropriate parental consent, and processed “special category data” without legal grounds to do so.
The commissioner said “special category data” included ethnic and racial origin, political opinions, religious beliefs and sexual orientation.
It also said TikTok may have failed to provide transparent, easily understood information to its users. The legal document covered the period from May 2018 to July 2020.
Information Commissioner John Edwards said the body’s provisional view was that TikTok “fell short” of providing proper data privacy protections. The body said its findings are not final and that it will consider any representations from TikTok before making a final decision.
“While we respect the ICO’s role in safeguarding privacy in the UK, we disagree with the preliminary views expressed and intend to formally respond to the ICO,” said a statement released by TikTok, which is owned by the Chinese company ByteDance.
Britain’s government is pushing through its online safety bill, which requires technology companies to protect children from harmful content.
The Information Commissioner’s Office said it has six other ongoing investigations into companies that do not appear to have taken their responsibilities around child safety seriously enough.
Government Launches Mobile App Sign Learn for Indian Sign Languages
By Press Trust of India | Updated: 23 September 2022
The Centre on Friday launched an Indian Sign Language (ISL) dictionary mobile application called Sign Learn containing 10,000 words.
The app was launched by Minister of State for Social Justice and Empowerment Pratima Bhoumik. Sign Learn is based on the Indian sign language dictionary of the Indian Sign Language Research And Training Centre (ISLRTC) which contains 10,000 words. The app is available in Android as well as iOS versions, and all the words in the ISL dictionary can be searched through Hindi or English medium, officials said. The sign videos of the app can also be shared on social media.
“The app has been developed to make the ISL dictionary easily available and to make it more accessible for the public at large,” a senior official said to PTI.
Notably, ISLRTC had recently signed an MoU with the National Council of Educational Research and Training (NCERT) on October 6, 2020, for converting NCERT textbooks from classes 1 to 12 into the Indian Sign Language (digital format) to make the textbooks accessible to children with hearing disabilities. This year, ISL e-content of NCERT textbooks of class 6 was launched, the official added.
Under Azadi ka Amrit Mahotsav, the Centre had launched ISL versions of selected books of National Book Trust’s Veergatha series.
With the joint effort of ISLRTC and NCERT, 500 academic words in Indian Sign Language were launched. These academic words are used at the secondary level which are often used in history, science, political science and mathematics, the official added.
Swiggy, Zomato Amongst Top 10 Global Food Delivery Platforms, Research Firm Says
By Press Trust of India | Updated: 22 September 2022
Indian food aggregator platforms Swiggy and Zomato have featured in world’s ‘Top 10’ e-commerce-based food delivery companies. Both companies are part of over 100 Indian unicorns. Unicorns are companies with a total value of over $1 billion (roughly Rs. 8,000 crore).
A report published by Canada-headquartered global research firm ETC Group titled ‘Food Barons 2022 – Crisis Profiteering, Digitalization and Shifting Power’ placed Swiggy and Zomato in the 9th and 10th spot, respectively.
According to the research firm, the food delivery sector refers to digital, on-demand platforms for ordering and paying for prepared food, groceries and other retail items. Restaurants/retailers fill the orders and couriers deliver them to customers within a prescribed timeframe.
China’s publicly listed food platform Meituan was at the top of the list, followed by the UK’s Deliveroo, and the US’ Uber Eats.
Further, Ele.me, DoorDash, Just Eat Takeaway/Grubhub, Delivery Hero, and iFood found themselves in the 4th to 8th spot.
“The food delivery sector is rapidly consolidating, but ownership is a moving target. As companies jostle for regional hegemony, they are buying, selling and swapping stakes in competitors,” the report said.
“Venture capital and Big Tech investment has fueled the sector, but companies have yet to deliver profits, even in the sector-friendly circumstances of the global pandemic when delivery became more necessity than convenience,” it added.
Against that backdrop, it said that tweaking the business model to move towards profitability — most prominently by adding grocery and pharmacy delivery — is currently underway.
The report also focused on issues faced by workers in the gig economy.
Delivery workers, it said, have been considered independent contractors instead of employees in most parts of the world. They are therefore ineligible for social security, injury compensation or other benefits.
“There are indications that some governments may be ready to enact labour reforms to try to end the platforms’ free ride. In the USA, New York City became the first city to pass legislation to regulate the food delivery sector, establishing minimum pay and other worker protections,” the research report added.
A major problem facing the sector, the report said, is the significant increase in trash from the takeaway single-use packaging.
Meta Ordered to Pay Voxer $174.5 Million Over Violation of Live Streaming Patents: All Details
By Agence France-Presse | Updated: 22 September 2022
A US jury on Wednesday ordered Meta to pay $174.5 million (roughly Rs. 1405 crore) for violating live-streaming patents developed by a US Army veteran seeking to fix shortcomings in battlefield communications.
A trial in Texas federal court ended with jurors deciding that “live” features at Facebook and Instagram used technology patented by Voxer, a company co-founded by Tom Katis, legal documents showed.
“We believe the evidence at trial demonstrated that Meta did not infringe Voxer’s patents,” a company spokesperson said in response to an AFP inquiry.
“We intend to seek further relief, including filing an appeal.”
Katis had reenlisted in the army after the September 11, 2001 attacks in the United States and served as a Special Forces communications sergeant in Afghanistan, court filings said.
When his combat unit was ambushed in Kunar province, he felt that the systems for coordinating reinforcements, medical evacuations and more “were ill-suited for time-sensitive communications with multiple groups in a highly disruptive environment,” the complaint said.
“Mr. Katis and his team began developing communications solutions in 2006 to remedy these shortcomings,” his lawyers said.
“The new technologies enabled transmission of voice and video communications with the immediacy of live communication and the reliability and convenience of messaging.”
Facebook approached San Francisco-based Voxer about potential collaboration after it launched a Walkie Talkie app in 2011, but no agreement was reached, according to legal documents.
Instead, the lawsuit argued, Facebook went on to launch Facebook Live and Instagram Live, incorporating Voxer technology into the features.
TikTok to Require Verification for Political Accounts, Bans Campaign Fundraising Ahead of US Midterm Elections
By Reuters | Updated: 21 September 2022
TikTok will begin requiring accounts belonging to US government departments, politicians and political parties to be verified and will ban videos aimed at campaign fundraising, the short-form video app said on Wednesday.
The move comes as TikTok, owned by China’s ByteDance, and other social media platforms are working to clamp down on political misinformation ahead of the US midterm elections in November, after years of being criticised for allowing such content to flourish on their services.
Political accounts can submit a request for verification, TikTok said, and the company will also work to confirm the authenticity of profiles it believes belong to politicians or political parties.
A verified account, indicated by a blue check mark on TikTok and other platforms like Twitter, means the platform has confirmed the ownership of the account.
TikTok has long faced scrutiny from US lawmakers, who have questioned the Chinese-owned app’s safeguards of user data. The app has also sought to preserve its image as a place for dance videos and comedy skits, and has banned political advertising since 2019.
To help enforce the ban, accounts belonging to politicians and parties will automatically be prevented from accessing advertising features, TikTok said in a blog post.
TikTok said it will update its policies to prohibit campaign fundraising. Content that will be banned under the new policy includes videos from politicians soliciting donations or political parties directing users to make a donation on their website.
The accounts will also be prohibited from using money-making features available to influencers on the app, like digital payments and gifting.
© Thomson Reuters 2022
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