Being up to date with regulatory changes is a major challenge when you’re operating under the jurisdiction of the Financial Industry Regulatory Authority (FINRA). Especially trying to comply with their constantly evolving requirements – take the recent updates to rule 17a-4 for example; they present significant challenges for small broker-dealer firms with limited I.T. budgets or rely on outsourcing their data compliance. That’s why AdvisorVault offers a comprehensive solution providing a one stop option for all your compliance and archiving needs, helping broker-dealer firms meet FINRA’s latest 17a-4 amendments while maintaining compliance — stop counting sheep (and sleep like a baby) — with AdvisorVault’s all in one Consolidated D3P Service.
Understanding Complexities of the New 17a-4(f) Audit-Trail Requirements
These new rule changes will have a huge affect on the third-party record-keeping services you choose, and the requirements related to timely production of your critical records. The compliance date for broker-dealers is May 3, 2023 – meaning this rule is already in effect. A big addition to Rule 17a-4 is the Audit-Trail Requirement, which can be demanding for small firms without an in-house IT team. This new rule mandates the maintenance of a complete and time-stamped audit trail that includes modifications, deletions, creation dates, identity information, and other relevant details. The complexity and scope of this requirement can feel overwhelming for many smaller FINRA firms.
AdvisorVault’s Consolidated D3P Service: Simplifying Compliance
Under the new requirements ; Firms may continue using the WORM approach for some records while utilizing an audit trail for others. The Securities and Exchange Commission (SEC) does not explicitly address this nuance, (surprise..) leaving it open to interpretation. However, the Financial Industry Regulatory Authority (FINRA) states that maintaining WORM for certain records and using an audit trail for others is permissible.
AdvisorVault’s Consolidated D3P service cover you in either direction, by offering 4 key features to streamline archiving and assist small firms in achieving full compliance with FINRA’s updated rule. These 4 areas are:
Don’t Leave Holes in Your Compliance
Urgent Action is Required To Ensure Seamless Compliance.
Compliance with these updated requirements for broker-dealers is not an option, but a time-sensitive imperative. Firms must act swiftly to ensure adherence to the new rules while mitigating compliance challenges. AdvisorVault’s Consolidated D3P service provides comprehensive solutions to support both WORM and audit trail approaches, helping firms seamlessly transition and maintain compliance with confidence.
The new requirement emphasizes the need for firms to verify the accuracy and completeness of their recording process. While the previous rule focused on verifying the quality of records, the updated rule shifts the focus to ensuring the completeness of capturing original records in the electronic recordkeeping system.
Remember, the compliance date for broker-dealers is already in effect—May 3, 2023. Delaying compliance efforts may expose your firm to regulatory scrutiny and potential penalties. Act now to safeguard your firm’s reputation, protect investor interests, and ensure seamless compliance with the amended rule.