The FINRA books and records rule or SEC 17a-4 outlines three main responsibilities for FINRA firms:
One: It outlines which electronic records must be retained by Broker-Dealers, i.e. data relating to the business and other communications such as emails and other communications they have allowed as defined in their communications policy. For example, if the communications policy allows Facebook to be used by reps when communicating with clients, then this data need to be retained as per 17a-4.
Two: SEC Rule 17a-4 defines how long electronic records must be retained, the best practice for Broker-Dealers and RIAs is 7 years.
Three: And finally, the books and records archiving rule directs FINRA members on what method they must use to store their electronic records. Essentially, Broker-Dealers, as of 2003 are no longer limited to using only optical, worm disk, CD-ROMs or DVDs or similar physical media to retain their electronic records. They can now use software which has the features built into it to specify an expiry or retention period for data storage. Then, after this expiry period or retention date the records are automatically deleted, freeing disk space for reuse thus saving costs.
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