These features collectively ensure that firms can leverage the efficiency of the cloud while satisfying the SEC's mandate for data permanence and accessibility.
: Since data in the cloud is technically "live" and modifiable, a D3P must create a separate, compliant secondary copy of that data to ensure its integrity.
: Regulators require that all stored data, including emails and electronic communications, be indexed so they can be retrieved and searched immediately.
The search for compliance under is often a journey through technical hurdles and regulatory demands. For broker-dealers using cloud storage, a Designated Third Party (D3P) acts as a critical fail-safe, providing regulators with a "backdoor" to access records if the firm cannot.
: The D3P must possess the technical tools to access and download a firm’s data archive in a format that is readable by auditors at any time. Six Features a D3P Needs to Make the Cloud 17a-4 Compliant
: The D3P must provide four specific documents to prove compliance: A Service Level Agreement (SLA). The 17a-4 Third Party Storage Provider Letter. The 17a-4 Broker-Dealer Letter. A formal Disaster Recovery procedure outline.
: While some records require shorter retention, a robust D3P service typically ensures full seven-year access to all data to meet the most stringent FINRA and SEC timelines.
To bridge the gap between standard cloud storage and strict regulatory requirements, a D3P must offer six essential features:
