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FINRA Record Retention Rules: What You Need to do to Make Sure Your Data Retention is FINRA Compliant.

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FINRA Record Retention Rules: What You Need to do to Make Sure Your Data Retention is FINRA Compliant.

On October 12, 2022, FINRA (Financial Industry Regulatory Authority) made changes to data retention requirements for all electronic records. Corporations that must follow FINRA regulations (e.g., banks and financial institutions) must keep electronic records for six years. Failure to comply with FINRA leads to hefty fines, so it’s imperative that organizations verify backups and archives are unaltered, secured, and retained to avoid millions in penalties.


JP Morgan Pays $200 Million in Penalties.

For large financial institutions, failure to comply with FINRA regulations is costly. In previous years, the worst fines totaling $14.4 million, were given to 12 firms that failed to secure financial records from being altered without a proper audit trail. In addition, any changes to records must be logged in case of a data breach and further investigation into the root cause. Unfortunately, the 12 firms failed to properly log and protect data, which caused damage to customers' data integrity.

JP Morgan was recently fined $200 million for failing to preserve email archives containing staff communications on workstations and mobile devices. After a third-party subpoena could not be fulfilled, an audit revealed JP Morgan's oversight of data retention policies, costing them millions of dollars in fines.


What Financial Institutions and Brokers Should Know

Any institution regulated by the US Securities and Exchange Commission (SEC) must review requirements and ensure they are met. The organization needs a strategy to back up and retain data to protect financial data. Of course, having a retention plan for electronic data is only one component of FINRA regulations, so every organization should thoroughly review FINRA compliance. Usually, full FINRA compliance requires a third party knowledgeable in all things FINRA, but organizations can take steps to secure their data and move forward with FINRA compliance.

Electronic data includes communication and stored customer information. Any sensitive information should be protected using cryptographically secure methods such as encrypting data at rest and in-transit. Backups and archives should also be secured, but they still must be available when necessary.

Archives differ from backups, and ArcTitan ensures that all archives follow FINRA rules while staying available to the people who need to work with them. For example, email archives are necessary for investigations and legal concerns. For example, the start of JP Morgan's audit was the failure to answer a subpoena correctly. Still, ArcTitan archives allow your legal team and corporate staff to search for important data to respond to subpoenas or investigate cybersecurity incidents.

Sound archives also provide a search feature and index content for fast results. ArcTitan offers an archiving platform that helps everyone involved in an audit quickly find data and export it for future use. Stakeholders get reports to identify any activity on the platform. ArcTitan secures all data in the cloud so that administrators do not have the overhead of applying specific security measures.

TitanHQs security platform has several other benefits to help with security training, compliance, data protection, phishing simulations, reports, and real-time intervention during simulated attacks. Find out how ArcTitan can help with your FINRA compliance and data archives with a free demo.

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FINRA ensures brokers and financial institutions follow proper data retention and archiving requirements to protect the interests of consumers and their financial data. A FINRA-compliant mail archiving service encrypts data and uses security access controls to allow only authorized users to access it. In addition, the system is flexible to fit any corporation or managed service provider's requirements and automates many features to make it convenient for administrators.

ArcTitan developers have worked meticulously to create an email archiving solution that complies with several regulations, including FINRA. Organizations that must follow several regulatory guidelines use ArcTitan to ensure that they archive and retain data for as long as necessary. In addition, having good backups and archives of electronic records is required in several other regulations, including HIPAA and FINRA, ArcTitan ensures that organizations are covered.

Electronic record and data retention for FINRA requires any financial institution or broker to store data for at least six years before it can be destroyed. Failure to comply with this regulation could lead to millions of dollars in penalties, so it's a compliance requirement that should not be ignored. In addition, FINRA requires all communications to be backed up and archived, including email messages stored and sent on workstations or mobile devices.

Most organizations need a third-party consultant to scan through all FINRA regulations to ensure that archives, backups, data storage, and email communications follow old & future FINRA requirements. ArcTitan was built with FINRA regulations in mind, so the platform ensures that the way you store communication data and the amount of time in your retention plan is compliant. Storage, retention, access rules, & data protection are built into the ArcTitan solution for financial businesses.

Any email communication must be protected. Backups and archives store a copy of data on the email server. Organizations can use backups in incident response and disaster recovery, and organizations retain archives for much longer in case of litigation or investigations. FINRA requires organizations to keep communication data for six years, and they must ensure it's secured from unauthorized access. In addition, stored email is encrypted as an added layer of security in case archives are stolen.

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