To make sure data is properly protected for full compliance, it is important to understand the difference between the two main data types – static and dynamic; each requires a different approach to ensure full protection. Static data consist of things such as word documents, scanned records, PDFs and client databases. However, because static data does not change often, a proper backup solution is designed to regularly pull this data off existing disk stored in-house or in the cloud. The key is to ensure no one is accessing these files when they are being backed up for full compliance with the demands of SEC rule 17a-4. For example, it is important that users are fully logged out of programs or not accessing documents during the backup process, this way data is not in a locked state. Or if users cannot disconnect from the system, the backup software must be selected that has the intelligence to recognize locked files to make copies of them when they are in use.
On the other hand, dynamic data includes emails, text messages, social media and other files that change constantly. An effective archiving solution will take copies of dynamic data before it is entered into the system by using a forward and store method. This method essentially captures data before it enters the customer’s system, places it in the archive and then forwards it on to its final destination. Therefore, ensuring it is not modified when it enters the customers’ system. This way the long-term data archiving retention requirements of SEC rule 17a-4 are met because files are kept in their original state at all times in a secondary location with a designated third party (D3P).
Understanding the difference between static and dynamic data types is important for FINRA firms to achieve 17a-4. In particular, they need to make sure these two different data formats are properly backed up and archived, concepts such as unlocking and forwarding data to third party providers is key to achieving this.
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