SEA Rule 17a-4 Designated Third Party (“D3P”) Services
Since 2007, SIRS has been a premier provider of SEA Rule 17a-4 D3P services to registered broker/dealers. SEA Rule 17a-4(f) allows a B/D to utilize “an electronic recordkeeping system” to preserve its required books and records.
Rule 17a-4(f) has two main requirements:
1) Electronic Recordkeeping System
17a-4(f)(4) requires a B/D to “store, separately from the original, a duplicate copy of the [firm’s electronic records]….”.
The electronic recordkeeping system must satisfy the requirements set forth in 17a-4(f)(2)(I):
(A) Preserve a record for the duration of its applicable retention period in a manner that maintains a complete time-stamped audit trail that includes:
(1) All modifications to and deletions of the record or any part thereof;
(2) The date and time of actions that create, modify, or delete the record;
(3) If applicable, the identity of the individual creating, modifying, or deleting the record; and
(4) Any other information needed to maintain an audit trail of the record in a way that maintains security, signatures, and data to ensure the authenticity and reliability of the record and will permit re-creation of the original record if it is modified or deleted; or
(B) Preserve the records exclusively in a non-rewriteable, non-erasable format;
Reputable technology providers, including Amazon, Google, and Microsoft, have developed 17a-4-compliant data archiving services.
2) Designated Third Party (“D3P”)
17a-4(f)(3)(v) requires a B/D to engage the services of “a designated third party” who has access to and the ability to download records from the B/D’s electronic recordkeeping system.
To address this requirement, SIRS offers its D3P services. Through a contractual agreement, SIRS establishes access to the B/D’s electronic recordkeeping system. For an annually renewable service charge of $500, SIRS will provide its services, including the signed undertaking letter required by 17a-4(f)(3)(v).
