SEC 17a-4 - Electronic Storage of Broker-Dealer Records

The Securities and Exchange Commission is publishing its views on the operation of its rule permitting broker-dealers to store required records in electronic form. Under the Rule 17a-4, electronic records must be preserved exclusively in a non-rewriteable and non-erasable format. This interpretation clarifies that broker-dealers may employ a storage system that prevents alteration or erasure of the records for their required retention period.

Broker-dealers are allowed to preserve records on "electronic storage media." Rule 17a-4 defines the term "electronic storage media" as any digital storage medium or system.

In addition, Rule 17a-4 requires that preservation of electronic storage media be done exclusively in a non-rewriteable and non-erasable format. WORM optical media (write once read many) is used for compliance with Rule 17a-4. Also, the member, broker or dealer must be stored seperately from the original. This duplicate copy of the record must be stored on any medium acceptable for the required.

Rule 17a-4 is commonly grouped with SEC Rule 17a-3. Together, these rules require:

• Written, enforceable retention policies
• A searchable index of all data stored
• Viewable and readily retrievable data
• Offsite storage of data
• Storage of data on WORM (write once read many) optical media

Smarsh, Inc. assumes no liability for the accuracy or completeness of this information. Please consult with an attorney for specific information on specific rules and regulations and how they apply to your business.

Helpful Links:
Details on 17a-4 on SEC.gov