The acting head of New York's financial regulator has asked for details on the instant-messaging service that several large banks are developing, out of the concern that many of the same banks are under investigation for rate-rigging.
Anthony Albanese, New York's acting Superintendent of Financial Services, wants the banks to hand over materials to show how they plan to retain messages using the service, whether they will use encryption to prevent regulators from reviewing the product and how they plan to prevent employees from circumventing compliance controls and regulatory review.
"Key evidence that regulators used to uncover and investigate... schemes [to rig benchmark interest and foreign exchange rates] was found in chat room transcripts and other written communications retained by the banks," Albanese said in the letter, sent Wednesday to David Gurle, chief executive of Symphony Communications Services.
Albanese told Gurle that he would soon contact the banks themselves for further information.
The banks under investigation for rate rigging are Bank of New York Mellon, Credit Suisse, Deutsche Bank and Goldman Sachs.
Those banks are investors in the Symphony product along with Bank of America, Citigroup, HSBC, JPMorgan Chase and Wells Fargo.
The banks want their own instant-messaging service, in order to reduce their reliance on the messaging products they now use on the costly Bloomberg data terminal.
Albanese took over as acting superintendent last month after the departure of Benjamin Lawsky, who made a name for himself over the last several years as one of the country's most aggressive financial regulators.