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Rules and Regulations

FINRA Sanctions & Fines…

FINRA fined Barclay's $3.75 million for failing to retain important archives in WORM (non-erasable) storage format.

Securities regulators require broker-dealer firms to archive and review specific company information, including company emails and their publicly available Websites.

In reviewing the 2013 Sutherland FINRA Sanctions Survey, enforcement actions related to record keeping and electronic communications rose significantly - by 132% over the prior year.

Securities Rules Are Clear, Corporate Websites Must Be Archived

FINRA considers a financial firm‘s Website to be an advertisement, and therefore subject to the same regulations as it would with any advertisement.

Firms must fully preserve and archive their public Websites.

SEC Rule 17a-4 & SEC Interpretive Releases:

Electronic Storage of Broker-Dealer Records & Guidance on the Use of Electronic Storage

The Securities and Exchange Commission (SEC) has published its views on the use of electronic storage and record retention for U.S. broker-dealers. In these releases, the SEC permits broker-dealers to store required records in an electronic format. Also detailed in these releases, the SEC outlines the process in which broker-dealers should store, index, and access their archived information.

In SEC Rule 17a-4 and subsequent related Interpretive Releases, The SEC requires that these archived records be

immutable

, or stored in a non-rewritable and non-erasable format,

WORM

(Write-Only Read-Many) storage device.

The archives must be readily accessible and stored to duplicate storage media devices. It must be serialized, and provide a searchable index.

In summary, SEC Rule 17a-4 requires archived data, which includes company Websites, be archived:

Using immutable, Write-Once Read-Many (WORM) compliant storage devices
Serializing and time stamping archived data
Keeping files readily accessible

SEC Resources

Electronic Storage of Broker-Dealer Records

http://www.sec.gov/rules/interp/34-47806.htm

Guidance to Broker-Dealers on the Use of Electronic Storage Media

http://www.sec.gov/rules/interp/34-44238.htm

Commission Guidance of the Use of Company Websites

http://www.sec.gov/rules/interp/2008/34-58288.pdf

Books and Records Requirements for Brokers and Dealers Under the Securities Exchange Act of 1934

http://www.sec.gov/rules/final/34-44992.htm

SEC Books and Records Amendments

http://www.finra.org/Industry/Issues/BooksRecords/

FINRA Regulatory Notices

FINRA Notice, 12-29, SEC Approves New Rules Governing Communications With the Public (June 2012)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p127014.pdf

FINRA Regulatory Notice 11-39, FINRA Social Media Websites and the Use of Personal Devices for Business Communications (August 2011)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p124186.pdf

FINRA Notice 10-06, Guidance on Blogs and Social Networking Web Sites (January 2010)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf

FINRA Notice 07-59, Supervision of Electronic Communications, FINRA Provides Guidance Regarding the Review and Supervision of Electronic Communications (December 1007)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p037553.pdf

Compliance Vault, LLC® assumes no liability or responsibility for any errors or omissions in the content of this Website. Please consult your compliance officer and/or attorney for specific information on how these rules and regulations apply to your firm.