What is the books and records electronic archiving rule?

The FINRA books and records rule or SEC 17a-4 outlines three main responsibilities for FINRA firms:

One: It outlines which electronic records must be retained by Broker-Dealers, i.e. data relating to the business and other communications such as emails and other communications they have allowed as defined in their communications policy. For example, if the communications policy allows Facebook to be used by reps when communicating with clients, then this data need to be retained as per 17a-4.

Two: SEC Rule 17a-4 defines how long electronic records must be retained, the best practice for Broker-Dealers and RIAs is 7 years.

Three: And finally, the books and records archiving rule directs FINRA members on what method they must use to store their electronic records.  Essentially, Broker-Dealers, as of 2003 are no longer limited to using only optical, worm disk, CD-ROMs or DVDs or similar physical media to retain their electronic records.  They can now use software which has the features built into it to 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.

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.