FIA works with industry coalition to modernize SEC record-keeping rule

15 November 2017

On November 14, five U.S. financial associations, including FIA, asked the SEC to update its broker-dealer electronic retention Rule 17a-4 by eliminating an obsolete recordkeeping requirement known as WORM (write once, read many) that was first put in place more than 20 years ago.

"WORM systems are costly, outmoded and inefficient storage containers" and the requirement to use these systems is "measurably slowing" the industry's adoption of modern communication technologies, the associations said.

The associations also asked the SEC to eliminate a requirement that they hire a third party who has the ability to download information from a broker-dealer's electronic storage system, which they said presents a serious cybersecurity threat.

In their place, the associations proposed a rigorous retention standard that is technology-neutral and consistent with current business record management principles. The amendments would also harmonize the SEC rules with the CFTC rules adopted in May 2017 that eliminated the WORM standard and third-party downloader requirements from CFTC requirements

  • FIA
  • Reporting