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Bloomberg Vault Helps Clients Navigate Choppy Regulatory Seas

January 31, 2014

Imagine reconstructing a trade for which a trader used multiple communications channels, including Bloomberg’s instant message, Yahoo! chat, corporate email, and the telephone to confirm transaction details. How can you gather digital records of these conversations to search and report on them in less than three days?

New regulatory mandates are prompting firms to adopt technology to document, archive and retrieve communications thoroughly and quickly.

In the event of an inquiry by the U.S. Commodity Futures Trading Commission (CFTC) under new Dodd-Frank Act rules, regulated firms must now provide a record of all communications and documentation associated with many trades – not just text-based interactions, but also recordings of voice conversations.

Enter Bloomberg Vault.

Bloomberg Vault helps financial firms cope with a variety of new compliance and record-keeping mandates that have intensified in the wake of the financial crisis. A series of existing and pending regulatory obligations pose a huge challenge for buy and sell-side firms of all sizes.

Bloomberg Vault evolved directly from infrastructure created to support the Bloomberg Professional service, specifically its proprietary messaging system. Since 2010, Bloomberg Vault has been adopted by nearly 700 firms that use the cloud-based data archiving and compliance platform to meet SEC, FINRA, CFTC, and U.K. FCA compliance mandates.

The enterprise-wide communications Bloomberg Vault monitors and archives typically occur over many disparate systems – such as corporate email, instant message, third-party chat systems, social media, mobile, voice and documents. These channels are usually managed by different departments across one geographic region, if not across the world. “That’s a lot of costly infrastructure and specialized skills for firms to manage in-house, and regulators are now raising the bar further,” says Harald Collet, the global business manager for Bloomberg Vault.

Take the swaps market, for example, in which the CFTC has taken a very tough regulatory stance. “Clients are expected to get the fully reconstructed trade sent back to the CFTC within 72 hours,” says Collet. “With the systems firms have now, that’s nearly impossible.” Bloomberg Vault helps clients by consolidating all of the various communication types into an easily searchable environment, with each record time-stamped on compliance storage, tagged with the counterparty legal entity identifier (LEI), and correlated to a particular trade. Bloomberg Vault enables firms to display these records in the context of the trade.

“You can select a counterparty and find all of the communications, trade documentation, and the people involved, and get a reconstructed view of the trade right there,” Collet says. “It’s incredibly powerful for our clients.”

More than 300,000 financial and business professionals use the Bloomberg Professional service to exchange an average of 220 million email messages and engage in nearly 20 million chats every day. “We’ve learned how to scale our systems to support that volume of communication,” Collet says.

Contributed by On Bloomberg, Bloomberg LP’s internal newswire.