Enhanced Compliance Assessment Boosts Financial Services Trust in Microsoft 365 Copilot
Microsoft 365 Copilot and Compliance with SEC Rules
Brokerage firms and financial institutions utilizing Microsoft 365 Copilot can now enhance their operations while ensuring compliance with the latest regulations set by the United States Securities and Exchange Commission (SEC). The new SEC regulations emphasize the importance of record-keeping to protect investors and prevent fraudulent activities.
Importance of Compliance for Financial Services
Recent updates to SEC rules have mandated that various financial services organizations must maintain detailed records of their transactions and communications. These requirements are designed to ensure transparency and accountability in the financial markets.
Key SEC Rules
Two significant regulations—SEC Rules 17a-4 and 18a-6—outline what firms must do to maintain compliance. The main stakeholders affected by these rules include brokers, dealers, and key members of national security exchanges. Here are some essential aspects of these rules:
- Recordkeeping: Organizations must retain evidence of every transaction, including trade confirmations, account statements, and client communications.
- Retention Periods: Certain records must be stored for specified durations—some for a minimum of six years, with the first two years requiring easy access.
- Accessibility: Financial records must be organized to allow quick retrieval for audits or regulatory inspections. This is crucial in helping regulatory bodies verify compliance and investigate potential issues.
Compliance Support Through Independent Assessment
In light of the SEC’s revisions of its rules in October 2022, Microsoft sought external expertise from Cohasset Associates to evaluate its compliance capabilities. The findings, which were made public in October 2023, confirmed that services like SharePoint, OneDrive, Microsoft Teams, Exchange, and Viva Engage meet the strict requirements for secure and reliable record management.
Cohasset Associates’ latest assessment expands upon their previous report and offers practical insights on how firms can configure Microsoft Copilot and Microsoft Loop to ensure compliance. Their evaluation also encompasses additional regulations from the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC).
Microsoft Cloud for Financial Services: Easing Compliance
Microsoft’s commitment to ease compliance while adopting advanced technology is a core focus of its offerings for financial services. The Microsoft Cloud for Financial Services is designed to assist firms in leveraging the benefits of cloud and AI technologies while remaining compliant with regulatory obligations.
Key elements of this initiative include:
- Fit-for-Purpose Platforms: Tailored solutions that fit the needs of capital markets, banks, and insurance companies.
- Pre-Built Accelerators: Ready-to-use tools to help in quick deployment and adaptation to compliance requirements.
- Broad Partner Ecosystem: Collaborations with partners to optimize compliance and transparency efforts.
- Continuous Compliance Monitoring: Keeping clients informed about various compliance regimes, regulatory updates, and security measures.
Tools to Support Regulatory Compliance
Microsoft also provides the Microsoft Purview Compliance Manager, which assists firms in evaluating their compliance status and managing related activities. This service includes pre-built assessments aligned with SEC rules and offers actionable insights for enhancing compliance.
Additionally, solutions like Immutable Storage for Azure Blob Storage and Preservation Lock are designed to help maintain and protect electronic records. These tools ensure that vital documents are stored in ways that prevent unauthorized alterations or deletions.
Embracing AI Technologies in Finance
Microsoft’s focus extends beyond just meeting current regulatory requirements. With ongoing innovations in AI and cloud technologies, the company aims to empower financial institutions to unlock significant business value. They emphasize strategies that build deeper customer relationships while navigating the complexities of compliance and regulatory landscapes.
To discover more about how Microsoft supports financial institutions in adapting to the evolving landscape of AI and compliance regulations, further information is readily available through their dedicated resources.
