The U.S. Securities and Exchange Commission (SEC) Rules 17a-3, 17a-4 and 17ad-7 were implemented under the Securities Exchange Act of 1934 and outline records archiving rules for the securities industry. In years past, these SEC rules covered only paper records, but today, they include electronic documents as well.
Most members of the national securities exchange, brokers, dealers and businesses in the securities industry must comply with SEC 17. The regulations specify which documents should be stored, including securities sales records, ledgers reflecting assets and liabilities, securities borrowed or loaned, dividends and interest received and more. Retention schedules and document management requirements are also part of the regulation.
Originals of all business communications and copies, whether by paper, by email or through audit reporting, must be indexed, easily searchable and stored on unalterable media. Additionally, securities companies are required to ensure the accessibility, security and integrity of their records. The SEC may examine a business’ document management system for compliance, and violators can face stiff penalties, which can include millions of dollars in fines. As a result, companies need systems that:
- Preserve all business records on a non-rewriteable, non-erasable media.
- Maintain searchable and readily available document storage.
- Verify the accuracy of their archiving system and document management processes.