For a moment there it looked like New York State regulators were going to be total wet blankets regarding a of a new, Goldman/Citi/Deutsche Bank-backed messaging startup that offers financial service workers near-total privacy.
But that moment of caution has officially passed.
New York’s top banking regulator struck a deal Monday with four major banks over record-keeping at the new chat and messaging platform, Symphony Communications LLC.
So what made New York's Acting Superintendent of Financial Services, Anthony Albanese learn to stop worrying and love the Symphony?
Seeming capitulation, of course.
The New York State Department of Financial Services, which had expressed concerns that certain Symphony features could hinder regulatory investigations, said the agreement covers record-keeping requirements and other protections “to help ensure the banks’ responsible use” of the platform.
The agreement was reached with Goldman Sachs Group Inc., Deutsche Bank AG, Credit Suisse Group AG, and Bank of New York Mellon Corp.—four banks regulated by the agency and among the 14 banks and money managers invested in the company’s technology.
The vague "record-keeping requirements and other protections" essentially boil down to a promise from Symphony and the banks that they'll maintain paper trails of their own should the confidential chatting application be used to do naughty stuff like insider trading.
Under the agreement, Symphony will retain for seven years a copy of all e-communications sent through its platforms to or from the four banks, and the four banks will store duplicate copies of the decryption keys for their messages with independent custodians.
But while the NYDFS is now totes on board with Symphony, it remains to be seen if full-time Wall Street antagonists like Elizabeth Warren will be swayed by the idea of "independent custodians" being responsible for reams of chat transcripts proving her case that Wall Street is the mother of all evil.
Lost in all the kerfuffle over Symphony's regulatory journey is the fact that both Dow Jones and Thomson Reuters are signing on to provide news and other content to Symphony users. Taking into account that Symphony is built to compete with Bloomberg, partnering with Bloomberg's arch rivals is both an obvious masterstroke and proof positive that Goldman Sachs is making its presence felt in Symphony's rollout.
Symphony launches to the general public tomorrow. So burn your Bloomberg terminals and sharpen up your insider trading allegories, you Wall Street no-goodnicks.