SEC 17A-4 and NASD 3010
Securities and Exchange Commission Rule 17a-4
The Securities and Exchange Commission (SEC) passed the Securities Exchange Act of 1934 as a means of protecting investors from fraudulent or misleading claims made by securities dealers. Rule 17a-4 of the
Securities Exchange Act was modified in 1997 to institute procedures on member firms for storage of emails and other electronic data. The way in which transaction records must be provided for review and auditing purposes was also put in place. The National Association of Securities Dealers (NASD) applies similar rules to its member firms through NASD 3010.
SEC rule 17a-4 and NASD rule 3010 apply to all companies and employees involved in the trading of securities. This includes securities firms, stock brokerage firms, banks and any financial institutions that fall under SEC or NASD jurisdiction. They require securities dealers to implement specific, enforceable retention procedures, which include the following:
| Archived messages including email must be stored in duplicate. One copy must be stored in an online archive, and a second copy must be stored offline on permanent, tamperproof media, such as Write-Once-Read-Many (WORM) technology. Storage media must be verified automatically for quality and accuracy. |
