The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for securities firms doing business in the United States. FINRA’s purpose is to protect American investors by making sure the securities industry operates fairly and honestly. FINRA has regulatory oversight over all securities firms that do business with the public.

We’ve compiled a short-list of the various requirements mandated by FINRA concerning record requirements. For a full description of each requirement, please visit FINRA’s web site or click on this link to see the entire record-keeping checklist:

Memoranda of Brokerage Orders and Dealer Transactions

Record Retention: Three (3) years, the first two years in an easily accessible place.

Associated Person Location and Identification Number Records

Record Retention: Three (3) years after the associated person has terminated employment and all other connections with the firm.

Associated Person Compensation Records

Record Retention: Three (3) years, the first two years in an easily accessible place.

Associated Person Complaint Records

Record Retention: Three (3) years, the first two years in an easily accessible place.

Customer Account Records

Record Retention: Six (6) years after the closing of the account or the date on which the information was replaced or updated, whichever is earlier.

Filetwin Commentary: It’s important to note here that it states “after the closing of the account”. If a customer remains a customer for five years, then the Broker would be required to hold that record for the five years that the customer was a customer and then six (6) years thereafter. In effect, that record would have a retention lifespan of eleven years.

Communications Supervision Records

Record Retention: Three (3) years, the first two years in an easily accessible place.

Contact Person Records

Record Retention: Six (6) years, the first two years in an easily accessible place.

Responsible Principal Records

Record Retention: Six (6) years, the first two years in an easily accessible place.

Office Records

Record Retention: For the most recent two (2) year period.

Communications with the Public

Record Retention: Three (3) years, the first two years in an easily accessible place.

Organizational Documents

Record Retention: Life of the enterprise and of any successor enterprise.

Filetwin Commentary: If certain documents need to be retained for an indefinite period of time, it only seems prudent to maintain a retention that stores all digital records indefinitely. In the digital world, the cost of storage is dropping so holding larger amounts of records is becoming more cost efficient.

Special Reports

Record Retention: Three (3) years after the date of the report.

Compliance, Supervisory & Procedures Manuals

Record Retention: Three (3) years after the termination of use of manual.

Exception Reports

Record Retention: Eighteen (18) months after the date the report was generated.

As you can see, certain documents require different retention policies. The longest period being six years – with the exception of the Organization documents. It’s our belief that Brokers should set their overall retention period for six (6) years. With Filetwin software, specific files can have specific retention periods set so you could create rules to match the above requirements, however, the SEC even recommends that files should be retained indefinitely. If you’d like to continue this conversation with one of our U.S. based Backup Specialists, please feel free to contact us 1 877 310-2884.

Copyright secured by Digiprove © 2011

We just found a great resource we wanted to share with everyone. The National Archives of Australia has a great resource on how to preserve CDs and DVDs otherwise known as optical storage media. Since we don’t advocate using optical storage but we know lots of people still use it, we wanted to address a couple of important topics regarding optical storage media; deterioration and proper handling of CDs or DVDs.

Deterioration of Optical Disks

The critical portion of an optical disk is the data layer. Although in theory it is well protected, in fact it can be damaged. In addition, because optical disks are a very dense form of information storage, small amounts of degradation can cause significant information loss.

The article outlines many sources of potential damage to disks:

• Solvents can affect the lacquer and metal layer on a CD.
• Damage to the polycarbonate plastic layer is a common cause of optical disk failure. Any marking that interferes with the light path like a  scratch or surface deposit, will cause problems. Some deposits, such as fingerprints, may cause etching of the plastic surface and can lead to irreversible damage.
• The polycarbonate plastic layer has a tendency to ‘flow’ over time which means that the plastic layers may slowly lose its shape, making the CD or DVD difficult to read.
• Inks used to print information on the label surface may corrode the plastic or lacquer layer and subsequently the metal layer.
• CDs are particularly prone to damage to the label side from writing implements. Sharp points can easily damage the lacquer and metal layers making the disk unreadable.
• As with all record media, temperature and humidity, particularly dramatic and sudden changes can cause degradation.
• Corrosion of the metal layer can result in a disk becoming unreadable. Certain metals, such as gold, are more resistant to corrosion than others.

Handling and Care of Optical Disks

• Handle disks by the outer edge or the center hole only, do not touch the surface of the disk.
• CDs or DVDs should not be bent or flexed.
• Do not write or mark in the data area of the disk (the area the laser reads). Label that case the CD or DVD resides in – don’t mark the disk itself.
• If you must label the disk itself, use a water-based felt-tip permanent marker to mark the label side of the disk. Do not use adhesive labels as the adhesive can damage the disk.
• Keep dirt or other foreign matter away from the disk as much as possible.

If an optical disk becomes dusty, dirty or fingerprinted, it may be possible to clean it before permanent damage occurs. Here’s how you should clean the disk. Gently remove loose dust using a non-abrasive photographic lens tissue, or very soft brush. Oily dirt deposits and finger marks can be removed using CD/DVD-cleaning detergent or isopropyl alcohol. The solution should be applied sparingly to the disk surface and wiped off with a tissu e and clean from the center outwards and not in a circular motion. f a scratch is created while cleaning, it will do less damage cutting across the tracks than along them.

On the label side of a CD, the data layer is very close to the surface so please consider the following:

• Do not scratch the label side of the disk.
• Do not use a pen, pencil, or fine-tip marker to write on the disk.
• Do not write on the disk with markers that contain solvents.
• Do not try to peel off or reposition a label.

As we said, we don’t endorse using CDs or DVDs to stay compliant because there is a life-span on optical storage media – and it isn’t as long as most regulatory requirements. So do the right thing and start looking into online backup. If you want to continue this conversation in person, give us a call at 1 877 310-2884. Our Backup Specialists are located in the U.S.A. and are always anxious to help answer your data backup questions.

  Copyright secured by Digiprove © 2011

Today we are focusing on the WORM requirement and the Third Party Notification letter. We’ve attached a link to a video clip that clarifies the confusion surrounding these stipulations http://www.youtube.com/watch?v=hb1lwPijJK8. Often times the SEC regulations are vague and are wide open to interpretation. After having tried to contact them and ask some basic questions, we were able to find a link http://www.finra.org/Industry/Regulation/Guidance/InterpretiveLetters/p005323 that explains what they intended for the wording to say. Keep in mind that their explanation is pretty wordy in itself.

If you need more information about how you can satisfy the intent of 17a-4 then please call our U.S. based customer service line at 1 877 310-2884 and one of our Backup Specialists can guide you through these regulations.

  Copyright secured by Digiprove © 2011