The critical component to data compliance
After ensuring all required records are remotely protected from all locations and across all systems, a broker-dealer firm must ensure the correct archiving procedures are in place. Unlike backup, archiving has an added complexity for broker-dealer firms because of rule 17a-4 and the various types of data and archiving rules that apply
Failing to understand the specific archiving rules will result in storing huge amounts of unnecessary data. For small broker-dealer firms this can add a huge cost to data compliance. AdvisorVault will avoid this increase in data storage costs and make the retrieval of data during an audit easier.
Avoid audit stress
One of the main causes of audit failure for a broker-dealer firm is the inability to produce old data related to emails or other transactions from years ago. The SEC often requires broker-dealer firms to retrieve old data during an audit. These time frames range from three to seven years and depend on the type of data. Failure to do so can lead to audit failure.
By using the built-in archiving feature of AdvisorVault, data backed up to the AdvisorVault remote data centre is automatically retained on non-rewriteable media in accordance to SEC and FINRA rules.
Designated third party (D3)
Broker-dealer firms need to address this key component and make it a part of their data compliance strategy. The FINRA Designated Third Party (D3P) requirement as outlined in rule 17a-3 &17a-4 is usually the last step once a firm has chosen a remote backup provider for their electronic records.
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 broker-dealers 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 broker-dealers 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
AdvisorVault is the only remote backup provider specifically designed to help small broker-dealer firms achieve today’s stringent data compliance requirements. With our designated third party status (D3P) we help small firms achieve all the required data compliance rules defined in 17a-3, 17a-4, as well as the supervisory and disaster recovery needs of FINRA rules 3510 and 3010.
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