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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
Seanna Browder


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Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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