SEC 17a-4 rule details stringent requirements on how electronic data is stored. It outlines requirements for data retention, indexing, and accessibility for companies that deal in the trade or brokering of financial securities, such as stocks, bonds, and futures.
SEC rule 17a-4 applies to broker-dealers and security-based swap (SBS) entities and outlines explicit requirements for regulated entities that elect to retain books and records on electronic storage media. SEC rule 17a-4 rule exists to help maintain market integrity and gives the SEC a way to access the records if a firm is unwilling or unable to comply with sharing its records.
SEC 17a-4 final rule, under SEC rule 18a-6, modifies requirements regarding the use of third-party recordkeeping services to hold records. Broker-dealers or SBS entities can now either designate a third party (D3P) to make the required undertakings or appoint an internal Designated Executive Officer (DEO) to take on this responsibility. The DEO also has a personal responsibility to actively manage and monitor the technical requirements for compliance with this rule.
Our comprehensive SEC 17a-4 D3P service is available for all types of electronic records, from cloud capabilities through to COLD (Computer Output to Laser Disk), back-office, imaged, transactional, email and messaging communications.
Our service offers compliance for an extraordinarily broad range of document management applications, including client-server to mainframe systems. Download the brochure below to find out more.
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The DEO must have the knowledge, credentials, and information necessary to access each repository, search, and promptly furnish to the Commission true, correct, complete, and current hard copies of any or all or any part of such books and records.
The DEO must produce records in the format required by the SEC or other regulator that allows the regulator or its designee to search and sort the responsive records.
The DEO is at all times responsible for fulfilling the obligation but can appoint in writing up to 3 designated specialists who are employees of the broker-dealer or SBS entity and have the knowledge, credentials, and information to fulfill record requirements.
A designated third party will ensure records are provided to the Commission or other relevant securities regulators promptly and in the correct format, enabling you to focus time, budget, and resources where they're needed most.
Access a team of designated third-party specialists with the knowledge and expertise required to meet the obligations of SEC rule 17a-4 without creating additional internal burdens created by a DEO for broker-dealers and SBS entities.
NCC Group is a global leader in Cybersecurity meaning your records will be securely stored in our physical or virtual Cloud Escrow vault and monitored 24/7 by our Security Operations Centre.
In our experience, a surprising number of firms have struggled with the comparatively minimal internal requirements for compliance prior to the SEC rule 17a-4 update, even with the help of Designated Third Parties. Firms choosing to take this responsibility in-house with the Designated Executive Officer option will have even more responsibility, which risks noncompliance with the requirements of the new rules. In addition, the DEO themselves are personally responsible for fulfilling these obligations.
Fortunately, the D3P option provides a means to definitively address these requirements with Escode’s team of specialists who have the knowledge and expertise required to meet the obligations of the new rule without creating additional internal burdens.
Your organization needs to be compliant with the SEC Rule 17a-4 if you face an audit by FINRA, the Financial Industry Regulatory Authority. With Escode’s SEC Rule 17a-4 D3P Compliance Service, you can easily demonstrate that you’ve met this requirement.
With the detailed audit and test reports and the system configuration plan from Escode in hand, you can face your next FINRA Audit with confidence. You’ll be working with the most experienced designated third party in the business and will have peace of mind knowing that your requirements are met.
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