Advertising Review: Is Your Marketing Collateral Review Process 17a-4 Compliant

Is Your Marketing Collateral Review Process 17a-4 Compliant?

RegEd’s Advertising Review solution is built to support firm’s marketing collateral approval process. In addition to robust workflows, Advertising Review is designed with compliance in mind including Worm and D3P support per SEC requirements.

Many regulations imposed by FINRA and the SEC have to do with the archiving of electronically stored information (ESI). Therefore, to ensure compliance firms are required to archive all necessary ESI. However, just archiving the data is not enough. SEC Rule 17a-4 mandates it must be archived in the proper format to meet compliance standards.

Write Once Read Many (WORM)

WORM describes a data storage device in which information, once written, cannot be modified, overwritten or deleted. This write protection affords the assurance that the data cannot be tampered with once it is written to the device.

The SEC defines which books and records to WORM such as purchase and sale documents, customer records, associated person records, customer complaints, and certain other matters. Additionally Rule 17a-3 and Rule 17a-4 specify minimum requirements with respect to these records that broker-dealers must make, and how long those records and other documents must be kept. 

Designated Third Party (D3P)

Broker-Dealers are required to have at least one Designated Third Party (D3P) Compliance Provider for each electronic records archive. RegEd’s D3P service bridges the compliance gap.

D3Ps agree that in the event of the failure or inability of the Broker-Dealer to download requested records, they will undertake that effort to provide to the requesting regulatory or legal body. As your designated D3P provider, RegEd will take the lead on providing the records it holds for you as your WORM storage provider and supply them to regulators if you cannot do so.

Penalties for Non-Compliance

It’s concerning how many firms fall into non-compliance with existing regulations. FINRA is becoming more and more focused on imposing fines and penalties. In 2017 FINRA fined 12 firms for a total of $14.4 million for, “…significant deficiencies relating to the preservation of broker-dealer and customer records in a format that prevents alteration.”

In a statement about the sanctions, the SEC pointed to the importance of record keeping in protecting investors, saying that records are the “primary means of monitoring compliance with applicable securities laws, including anti-fraud provisions and financial responsibility standards.” FINRA further explains how WORM storage is critical due to the increased volume of sensitive data being stored electronically.

WORM Compliance with Advertising Review

RegEd offers a robust, scalable, and configurable WORM storage solution that enables firms to fulfill their books and records obligations.

RegEd’s Advertising Review WORM storage device offers the ability to automate retention events and periods based upon workflow configuration within the application to ensure your data is captured at the required points of submission, revision and approval. Once deployed with your firm, no additional steps must be taken to ensure your data is sent to the WORM storage device with its appropriate metadata and attachments. 

Even if your firm’s marketing team uses a different front-end to create content, Advertising Review can easily integrate with APIs to automatically push content to the compliance review process where final approved files can be properly stored in a WORM compliant format.

Stay Compliant

Using a product like RegEd’s Advertising Review ensures firms interweave compliance within their processes. Compliance is always more cost effective & protective of your business reputation than alternative fines and sanctions. Firms that research, understand, and apply best practices in their marketing collateral review process avoid negative publicity and profit-loss.

Leave a Reply

Scroll to top