As managers look to explorer new methods to market their funds, a number of email and marketing products and platforms are being used that have not been scrutinised for compliance relating to the finance sector – specifically for hedge funds and asset managers.
As more and more products become available to send marketing material, performance details and fact sheets for hedge funds and asset managers, a study conducted by newly created Hedge Fund Marketing Index, looked at a number of vendors to see how these products fulfilled the legal and compliance requirements for hedge fund marketing and asset management marketing.
Specifically, the study looked at the Securities and Exchange Commission (SEC) Rule 17a-4 which describes stringent rules that govern the storage of all electronic messages including e-mail and instant messages for its members. Whilst most suppliers continually speak about CAN-SPAM regulations the Securities and Exchange Commission (SEC) Rule 17a-4 is the most important one. Under the rule, electronic records must be preserved exclusively in a non-rewriteable and non-erasable format. This interpretation clarifies that managers must employ a storage system that prevents alteration or erasure of the records for their required retention period.
This also pertains to archiving of the emails and related data. According to the rule, records of numerous types of transactions (including emails and social media) must be retained and indexed on indelible media with immediate accessibility for a period of six months, and with non-immediate access for a period of at least seven years. Duplicate records must also be kept within the same time frame at an off-site location.
With the exception of ProFundCom, all email marketing systems failed to fulfil this legal requirement. ProFundCom complies with the Securities and Exchange Commission (SEC) Rule 17a-4 which describes stringent rules that govern the storage of all electronic messages including e-mail and instant messages for its members.
This was a shocking conclusion to the study that all other products that were reviewed failed the Securities and Exchange Commission (SEC) Rule 17a-4. The products that were looked at were
- Vertical Reponse www.verticalresponse.com
- Contant Contact www.constantcontact.com
- Campaign Master www.campaignmaster.co.uk
- Benchmark Email www.benchmarkemail.com
- Dot Mailer www.dotmailer.com
- CampaignMonitor www.campaignmonitor.com
The details on ProFundCom’s compliance are listed below in relation to the Securities and Exchange Commission (SEC) Rule 17a-4
ProFundCom stores all emails that have been sent out from the system in a special write-once table, where it remains locked for the SEC regulatory period of seven years. These transaction can be queried directly via the ProFundCom Interface to provide immediate regulatory bodies access.
To comply with the regulation the index can be searched and used to retrieve records and all activity in the message store is monitored. This data can also be be made available to other corporate email archiving applications via our XML interface. Products we have integrated with are InterWoven, PlumbTree, Legato and FileNet using the PFC XML interface. If an email archiving system is already in place or if tight integration is not required all emails generated by ProFundCom can be bcc’ed to that account.
Disclaimer from Hedge Fund Marketing Index: The researcher for this study used client interviews and provider websites to collate the information for this report. The Hedge Fund Marketing Index. While Hedge Fund Marketing Index strives to make the information on its website as timely and accurate as possible, the company makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this report, and expressly disclaims liability for errors and omissions in the contents of this site. No warranty of any kind, implied, expressed, or statutory, including but not limited to the warranties of non-infringement of third party rights, title, merchantability, fitness for a particular purpose or freedom from computer virus, is given with respect to the contents of this website or its links to other Internet resources. Reference in this report to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring by the Hedge Fund Marketing Index.