D3P Service

Specially designed
for small firms

Helping firms just like yours

AdvisorVault’s Consolidate D3P solution was created to give small FINRA firms a total, yet inexpensive option to achieve SEC rule 17a-4. Firms, especially broker-dealers and registered investment advisors often find themselves forced to use several providers to achieve all the demands of 17a-4; they have to outsource the backup of books and records, the archiving of email and the recovery of critical systems to several third parties. This was complex during audits not to mention expensive. AdvisorVault has changed this.

 

 

What is a D3P?

For small FINRA firms with limited time and budgets, finding the best partner to assist them with their D3P needs can be a daunting task. They need to choose a provider that can help them achieve these requirements effectively – choosing the wrong D3P can cause unnecessary burden and quickly increase the overall cost of data compliance.

BENEFITS of the D3P

The majority of fines handed out these days by FINRA are failure to properly supervise communications. The main reason is firms want to take advantage of new technology; they want to use mobile devices, social medial and cloud based messaging to communicate with partners and customers. Because of this they often lose control of the whole process. Now, a new approach is needed to make sure all these new ways of communicating are kept compliant

The D3P’s responsibility mainly is to  prevent records from being overwritten, erased or altered. Thus giving firms built-in long-term archiving for historical data retrieval

The D3P ensures that if key IT personnel retire or leave, the D3P can always access current or archived data, thus the D3P becomes an integral part of the firms compliance audit process

The D3P maintains compatibility with legacy systems. In the case where a broker-dealer merges, has been acquired or takes over another company that uses different systems.

Most importantly, in the event of a disaster where a broker-dealer has lost all their systems or data, the D3P ensures current and historical data will be made available for restoration

The Designated Third Party puts extra responsibility on firms and it is designed to ensure an amount of long-term stability is built into their data compliance strategy. By choosing the right D3P, not only do firms have greater confidence during SEC audits, they will also have more chance of gaining long-term customer confidence regarding electronic records retrieval and supervision.

ANSWERING THE BIG QUESTIONS ABOUT THE DESIGNATED THIRD PARTY (D3P)

  • Notify the SEC (or other designated securities regulators) in writing of their intention to fulfill the third-party access and download function for the broker-dealer or Registered Investment Advisor.

  • Provide securities regulators with the information they need to download electronic records from the firms systems at the regulator’s request.

 

  • Provide securities regulators with access to records and information stored on the broker-dealer’s systems independently of the firm, even if the firm is not cooperating with the regulator.

 

  • Preserve records in a non-rewriteable, non-erasable format or one that prevents their overwriting, erasing, or otherwise altering during its required retention period through the use of integrated hardware and software codes.

  • Verify automatically the quality of the backup process and index records preserved on the storage media. The D3P prerequisite is essentially designed to ensure firms electronic records are kept for the required amount of time and can be easily retrieved in the event of an audit or during regular compliance reviews.

  • It is critical that the firm establish a relationship with a third party that has the ability to provide the SEC (or other securities regulators) with independent access to their retained electronic records and information.

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