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The Securities and Exchange Commission (SEC) Rules focus on dictating electronic transaction record and business data preservation, emphasizing on Email communication. How and where the data is stored and indexed as well as an audit system to track results. The rules, specifically 17a-3 and 17a-4 are structured in a way to protect investors from misrepresentation and fraud via electronic communications. National Association of Securities dealers (NASD) Conduct Rule 3110 and New York Stock Exchange (NYSE) Rule 440 (pdf) cross reference the SEC 17a-3 and 17a-4 Rules and focus on format, medium and retention periods. There is a strong emphasis on having a 3rd party involved to ensure compliance and address any conflict of interest issues. The rules are in play to all persons engaged in the trading of securities or acting as a broker, including Broker-Dealer firms and registered representatives that are subject to SEC, NASD and/or NYSE jurisdictions. As the rules were in effect as of May 2003, the resources have been shifting now to the small and medium Broker-Dealers.
How UbiStor Can Help
UbiStor helps organizations address these SEC and NASD Rules without the need for additional equipment or services such as tape libraries, media and off-site media with the following solutions:
Storing electronic communication records with UbiStor’s online email archive solution gives organizations the confidence in knowing that this specific business data is secure, off-site, compliant and yet quickly accessible. Electronically transporting records using industry-standard encryption to off-site secure locations (Link to data center page) where the data remains encrypted minimizes the chance of any unethical access or destruction of data. Robust functionality for Email management for inbound and outbound communication can be tightly configured to better protect your organization. Reporting for auditing and investigation is uncomplicated and facilitates efficient and complete results.
UbiStor’s online email archive solution can help traders, brokers and others neighboring in such activities adhere to SEC/NASD Rules and Regulations by:
- Storing data at highly secure, off-site locations
- Ensuring that critical records are retained and communications remain encrypted
- Utilizing disk-to-disk medium
- Providing storing, monitoring, archiving and reporting for Email and instant messages.
SEC/NASD contains the rules pertinent to managing electronic communication data records:
SEC
- Preserve electronic records of transactions and general securities business (inbound, internal, outbound)
- Store in non-rewriteable and non-erasable media, the quality of which must be verifiable
- Store original and duplicate copies in separate locations
- Create and store indexes of the electronic records
- Have an auditing system in place and store audit results for all electronic records
- Retain for retention periods from 3 to 6 years, having the most recent 2 years in a easily retrievable location
- Appoint an independent third party to access and download a firm’s electronic records upon request
Complete SEC Rule 17 (pdf)
NASD
- Preserve all electronic communication between client and firm
- Preserve applicable Email records in compliance with NASD/NYSE rules and with SEC Rules 17a-3 and 17a-4
- Preserve any electronic sales literature, advertisements and correspondences to the public
Complete NASD Rule 3110 (pdf)
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