SEC Compliant Document Storage & Management
The Securities and Exchange Commission (SEC) has instituted regulations on storing and retrieving documents, as mandated in SEC 17A. In a fast-paced digital trading environment, the security of stored documents and what information needs to be logged on those trades are vital to oversight. Because of the sensitivity of this broker/dealer data, keeping that data in a secure place that allows for easy retrieval is of the utmost importance and SeraScript is the solution.
Understanding the SEC 17A
The SEC 17A is divided up into several sections, but the vital ones are sections 17A-3 and 17A-4. Section 17A-3 deals with what documents the firm must keep and how long they need to be available. Section 17A-4 looks at how those documents should be stored and includes a wide variety of storage options, ranging from micro-media to online electronic storage. The regulations don’t thoroughly define what electronic storage is, leaving the interpretation up to the firm. The guidelines supplied in Section 17A-4 include:
- The storage medium should be non-rewriteable and non-erasable to preserve the document and avoid changes to it.
- The medium must verify the accuracy and quality of the storage process.
- Storage media should take note of, and serialize the original data, then make digital backup copies to be retained for the duration as stipulated in Section 17A-3.
- The medium must be able to readily download stored data and indexes for that data on demand.
In addition to these stipulations, Section 17A-4 also requires that brokers have an audit system to ensure entered information integrity. If the company relies solely on electronic media, it must also have a third-party login and download the information for verification purposes. These measures were implemented in response to an increased awareness of personal user information on the internet. More importantly, archiving those records over the long term wasn’t a concern for some of these broker-dealers. If a company failed to pay for their hosting package, the company holding their data would delete it. This action was against what the SEC recommended for personal user data and pushed the regulatory body to adopt more stringent measures to ensure this wouldn’t happen in the future. If a company doesn’t meet the minimum standards of what the SEC expects, a company could face severe penalties, which could significantly impact its bottom line.
Penalties for Non-Compliance
As with most mandates by governmental organizations, non-compliance can have severe repercussions. The most common penalties a company may face include revocation or suspension of trading licenses alongside financial compensation. FINRA notes that several firms were fined for not following the rules outlined in Section 17A. The FINRA requirements mirror that of the SEC, so being compliant with one also means that the firm is compliant with the other. A storage system that any company that wants to be SEC complaint utilizes will also conform to those FINRA regulations. This ease of interchangeability of standards means that a company should ensure that they achieve that level of compliance, not just for regulatory reasons, but to prove to clients that they take the security of personal information seriously.
SeraScript Complies with SEC Regulations
It’s because of this focus on a secure online storage system that SeraScript was designed and implemented. SeraScript 365 is a digital document management system (DDMS) that uses automation to make it easier for a firm to manage its digital documents. It has complete integration with Microsoft Office 365 to allow for easier use. Alongside SeraScript 365 is our storage system designed to meet the most stringent of regulations, SeraScript Vault. Using the power of blockchain’s immutability, we’ve put together a storage system that uses Microsoft Azure’s Write Once Read Many (WORM) systems. In keeping with Section 17A-3, SeraScript Vault allows easier management of audits and provides access to a third party if necessary.
Why Choose SeraScript?
SeraScript is unique in approaching the problem of compliant storage. Innovative blockchain-based architecture ingrains immutability into the storage system. Easy integration with Office 365 means that a business doesn’t have to adjust to different software, just integrate the required tools into existing productivity modules. Bulk file uploads make it much easier to deal with large volumes of transactions. Thanks to redundant storage in several geographically distributed data centers, data remains resilient, even if a single-center fails. All of these elements make SeraScript an ideal choice for any company seeking to raise their document security to SEC/FINRA standards. Contact us today to learn more about what we offer!
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