Understanding SEC email compliance rules for RIAs

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The Securities and Exchange Commission (SEC) has a number of rules governing the retention and storage of electronic communications, including email. The main rule relevant to registered investment advisors (RIAs) is SEC Rule 17a-4, which requires covered entities to preserve certain electronic communications in a convenient format and accessible condition for a specific period. This rule ensures that RIAs and financial advisors maintain accurate records of their communications and activities in order to protect customers.

SEC Rule 17a-4 is a complex regulation, but as an RIA, it is important to learn how it applies to your practice. We’ve outlined the key aspects of this compliance rule to help you understand its significance and requirements better.

Compliance obligations under SEC Rule 17a-4

The rule imposes recordkeeping requirements for emails and other electronic communications sent and received by RIAs. The following is a basic overview of these obligations, and they may not encompass all the specific requirements that apply to your practice. As such, it’s strongly advised to review the rule in its entirety and consult with experts to ensure that your firm’s practices align with the specific rules and regulations applicable to your circumstances.

What records must be retained?

Under SEC Rule 17a-4, you are obligated to retain records relevant to your business activities. These encompass records of all transactions, communications, financial statements, and other critical business documents.

How long must records be retained?

Records must be retained for a minimum of three years. However, some records might require longer retention periods, depending on their type and nature. It is essential to familiarize yourself with the specific retention requirements for different record categories.

How must records be stored?

The SEC requires you to store records in a non-rewritable, non-erasable format. This ensures that records are safeguarded against destruction, falsification, and manipulation. Additionally, records must be readily accessible. As such, you need to store them in a location that is secure and allows quick retrieval when needed.

Electronic storage solutions, such as cloud-based repositories, can be effective options for safely storing these records, but you must ensure that the chosen method complies with the regulatory standards for data protection and accessibility.

Who has access to records?

Only authorized personnel, both within your firm and relevant regulatory bodies like the SEC, should have access to the retained records. This restricted access ensures the confidentiality and integrity of sensitive information.

Related reading: Email archiving at your RIA is about more than just compliance

Technology solutions for SEC email compliance

To facilitate compliance with SEC Rule 17a-4, various technology solutions are available to RIAs and financial advisors. These solutions can assist in streamlining the recordkeeping process and ensuring adherence to the regulation.

What are the different technology solutions available?

The most common technology solutions for SEC email compliance include archiving systems, records retention solutions, and cloud-based data protection platforms. Given that most RIAs are already using Microsoft products, we recommend that you use their tools to meet some of your compliance requirements.

  • Archiving systems, such as Preservation Lock on Microsoft Office and Microsoft 365, are designed to facilitate secure storage and retrieval of digital records.
  • Records retention solutions, such as Microsoft Purview, can help you classify and retain records for long-term storage, as required by the SEC.
  • Cloud-based data protection platforms, such as Microsoft Azure, allow for secure storage of records in the cloud with automated backup capabilities.

How can technology help RIAs and financial advisors comply with SEC Rule 17a-4?

The primary benefit of these tech solutions is that they streamline the recordkeeping process. Automated retention policies, advanced search capabilities, and secure storage options make it easier for you to comply with SEC email compliance regulations.

Additionally, these solutions can help you save time and resources as they eliminate the need for manual recordkeeping. This can free up your staff to focus their efforts on other areas of your business, allowing you to remain compliant with the SEC’s regulations while optimizing your resources.

Related reading: Smarsh vs. Global Relay vs. Microsoft: What should your RIA use for email archiving?

Enlisting the help of a specialist

Implementing any of the above technology solutions on your own ensures your RIA’s compliance with SEC Rule 17a-4. However, enlisting the help of a managed services provider like RIA WorkSpace is highly recommended. We can help you understand the requirements better and design a compliant solution for your practice. 

Since 2007, small- and medium-sized RIA firms across the United States have trusted RIA WorkSpace with their security, cloud, and managed IT needs. Our experienced team can provide tailored support and guidance to ensure that your firm remains compliant with SEC email compliance rules and other relevant regulations.

Contact us today to learn more about our services and find the perfect solution to meet your needs.