BROKERS, WATCH YOUR E-HYPE
FEW BROKERS TODAY CAN ZAP E-mail to their clients. That's because federal regs, created when paper was king, require supervisors to review broker-to-customer correspondence. And bosses don't want to monitor cybermessages all day.
Well, that obstacle may soon vanish. The Securities & Exchange Commission and the Securities Industry Assn. are close to an agreement on updating the regs. One change would permit supervisors to review just a sampling of E-mail instead of every message.
Another possible remedy is technology. Three companies--SRA International, Integralis, and Sequel Technology--are pooling their expertise to create an automatic watchdog to monitor brokers' E-mail. SRA can catch wording on the SEC no-no list such as ''hot little tech stock'' or ''the next Microsoft.'' The system also analyzes tone and context to root out hype. Integralis has the knowhow to scan and open E-mail; Sequel can track and record the messages. The solution is being tested in several brokerage houses, including Merrill Lynch and Dean Witter Reynolds.
EDITED BY LARRY LIGHT
Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.