How do Small FINRA Firms Outsource 17a-4 Electronic Records Archive?

Since FINRA realizes small FINRA firms don’t have the IT budgets to perform the archiving of electronic records themselves, they are allowed to outsource this to a designated third party, however before doing so, firms, especially broker-dealers need to understand a few important features of SEC rule 17a-4.

Firstly, 17a-4 requires that firms keep secondary copies of data in a geographically separate location. It doesn’t matter if this data resides on systems at head office, on mobile devices or in the cloud, an automated process needs to be put in place to properly protect electronic records and communications.  The best method for small broker-dealers and registered investment advisors is to use a provider that offers Remote Data Archiving.

Secondly, rule 17a-4 demands that firms archive email as well as other communications, similarly to data contained in books and records, this needs to be kept for 7 years in its original format. For small firms, the Store and Forward is the best way to make sure this information is kept compliant. The Store and Forward method, captures communications before they reach a firms’ systems, whether it’s Stored on corporate systems, mobile devices or in the cloud.

And lastly, rule 17a-4 asks firms to put in place a disaster recovery plan. This is critical, particularly for small broker-dealer firms and as such its ideal they use the same provider who is acting as the D3P and the electronic records archiving provider to  help with recovery of data or systems. Therefore , they need to make sure the provider has the features in their software to perform a full backup image of server and pc disk drives and save them remotely with the ability to perform incremental snapshots thereafter for point-in-time full restores back to original hardware or dissimilar systems.

Allan Lonz
Allan Lonz
Allan Lonz, President and CEO of AdvisorVault is a veteran in the field with over 15 years experience providing data compliant solutions to the financial industry, especially for small firms. Recognizing that very few backup vendors understood the data compliance challenges of small broker-dealer firms, Allan created AdvisorVault - a remote backup company designed to provide his customers with a solution to ensure they meet all current rules from FINRA and the SEC. It includes all the hardware and software to remotely backup, archive and ensure disaster recovery of critical electronic records such as email, books and records and all other data at head office, branch offices and remote locations in accordance with rules 17a-3 and 17a-4. With Allan’s deep understanding of technology, compliance and finance he brings a unique mix of expertise that allows him to design a complete turn-key product. Priced at one small monthly fee, this "out-of-the-box " approach takes the burden off his customers shoulders and allows them to experience complete data compliance peace of mind simply and inexpensively.