What is AdvisorVault’s Consolidated Designated Third Party (D3P)?
AdvisorVault’s Consolidate D3P solution was created to give small FINRA firms a total, yet inexpensive option to achieve SEC rule 17a-4. Firms, especially broker-dealers and registered investment advisors often find themselves forced to use several providers to achieve all the demands of 17a-4; they have to outsource the backup of books and records, the archiving of email and the recovery of critical systems to several third parties. This was complex during audits not to mention expensive. AdvisorVault has changed this.
What is the D3P?
For small FINRA firms with limited time and budgets, finding the best partner to assist them with their D3P needs can be a daunting task. They need to choose a provider that can help them achieve these requirements effectively – choosing the wrong D3P can cause unnecessary burden and quickly increase the overall cost of data compliance.
Answering the Big Questions about the Designated Third Party (D3P):
1. What is the firm’s responsibility in choosing a data compliance partner as their D3P?
It is critical that the firm establish a relationship with a third party that has the ability to provide the SEC (or other securities regulators) with independent access to their retained electronic records and information.
2. What are the third party’s responsibilities?
- Notify the SEC (or other designated securities regulators) in writing of their intention to fulfill the third-party access and download function for the broker-dealer or Registered Investment Advisor.
- Provide securities regulators with the information they need to download electronic records from the firms systems at the regulator’s request.
- Provide securities regulators with access to records and information stored on the broker-dealer’s systems independently of the firm, even if the firm is not cooperating with the regulator .
- Preserve records in a non-rewriteable, non-erasable format or one that prevents their overwriting, erasing, or otherwise altering during its required retention period through the use of integrated hardware and software codes.
- Verify automatically the quality of the backup process and index records preserved on the storage media. The D3P prerequisite is essentially designed to ensure firms electronic records are kept for the required amount of time and can be easily retrieved in the event of an audit or during regular compliance reviews.
Additional Benefits of the D3P:
Aside from simply ensuring rules 17a-3 & 17a-4 are met and increasing confidence during SEC audits, the D3P provides several other benefits:
- The D3P prevents records from being overwritten, erased or altered. Thus giving firms built-in long-term archiving for historical data retrieval
- The D3P ensures that if key IT personnel retire or leave, the D3P can always access current or archived data, thus the D3P becomes an integral part of the firms compliance audit process
- The D3P maintains compatibility with legacy systems. In the case where a broker-dealer merges, has been acquired or takes over another company that uses different systems, the D3P will retain the information in a standard format compatible with new systems
- Most importantly, in the event of a disaster where a broker-dealer has lost all their systems or data, the D3P ensures current and historical data will be made available for restoration back to the original location or to an alternate disaster recovery site
The Designated Third Party puts extra responsibility on firms and it is designed to ensure an amount of long-term stability is built into their data compliance strategy. By choosing the right D3P, not only do firms have greater confidence during SEC audits, they will also have more chance of gaining long-term customer confidence regarding electronic records retrieval and supervision.
The Advantage of Choosing AdvisorVault’s Consolidated D3P:
With SEC 17a-4 compliance in mind, AdvisorVault’s consolidate D3P service has one main objective in mind: help small FINRA firms pass audits as effectively as possible. This is done by essentially ensuring auditors are satisfied as quicly as possible by consolidating all data into one central secure web interface that can be accessed at any time by compliance officers or other key personnel.
What Financial Professionals Are Saying About AdvisorVault
“AdvisorVault made it really simple to archive all our data. They even connected into our cloud provider and made sure this was 17a-4 compliant”
“As soon as we received FINRA approval of our BD registration, we launched AdvisorVault, they told us exactly how we should move forward with our data archiving to meet the D3P requirements”
“AdvisorVault was simple! They even helped us with the FINRA 17a-4 attestation letters; we immediately scraped whatever we’ve backed up so far with our other provider and started with them”
“Once we took a close look at AdvisorVault, we immediately engaged them for our data and email archiving. Additionally, they hosted a full Exchange email solution for records retention and supervision”
“AdvisorVault made it very easy for us to implement a compliant backup and archiving solution to archive electronic records on our PCs and on the server at head office.”
“I’m pleased so far with how helpful and insightful they have been to work with and our firm made a good decision to switch our backup functions, email SPAM and archiving to AdvisorVault”
“AdvisorVault was at the top of the list when we looked at our entire disaster recovery/compliance/archiving/
anti-spam platform and vendors…we eventually consolidated everything with them”
“The way AdvisorVault approaches data backup and archiving, we replaced our current backup solution fully with them to recover servers from failure”