Is Worm Disk the Only Way to Retain Data for SEC Rule 17a-4?
Broker-Dealers are no longer restricted to using only worm disk to store electronic records to satisfy rule 17a-4. This used to be the case but was changed by the SEC in 2003. Because of the increase in data amount and new technology, 17a-4 was amended to allow Broker-Dealers who are FINRA members to store electronic records in a non-rewriteable, no-erasable format by the use of software codes which prevents erasing, and not through the use of worm disk.
This has a huge impact of small FINRA firms because they can now easily outsource their data archiving to third party providers that offer software which has the features built into their solution and can simply specify an expiry or retention period for data storage. Then after this expiry period or retention date the records are automatically deleted freeing disk space for reuse thus saving costs.