§ 240.17a-4 — Records to be preserved by certain exchange members, # brokers and dealers.

Rule 17a-4 sets forth the retention periods and preservation conditions for the records enumerated in Rule 17a-3 and for other records of the broker-dealer's business.

(a) Six-year retention.

The following records shall be preserved for a period of not less than six years, the first two years in an easily accessible place:

- The blotters and ledgers required by Rule 17a-3(a)(1)–(5); - Customer account identification records under Rule 17a-3(a)(9) and (a)(17); and - Certain other core records.

(b) Three-year retention.

Most other records required by Rule 17a-3 — including memoranda of brokerage orders (a)(6), proprietary-account memoranda (a)(7), confirmations (a)(8), customer complaints, and broker-dealer communications — must be preserved for at least three years, the first two years in an easily accessible place.

(c) Trial balances and net-capital computations.

The broker-dealer's trial balances, net-capital computations, and customer-reserve computations are preserved for three years, the first two years in an easily accessible place.

(e) Other required records.

Paragraph (e) imposes specific preservation periods for a variety of supplementary records, including:

- (e)(5) — records of Reg BI policies and procedures, disclosures, and supporting documentation: six years; - (e)(7) — audit committee / designated supervisor records; - (e)(9) — records of advertising and sales literature not otherwise required, together with the required approvals: three years; - (e)(10) — records of Form CRS delivery dates: six years.

(f) Electronic storage media.

A broker-dealer may preserve required records electronically, provided the media and the broker-dealer's systems satisfy all of the following conditions:

1. Write-once, read-many (WORM) or audit-trail alternative. Historically the rule required non-erasable and non-rewriteable storage. The 2022 amendments added an alternative "audit-trail" option under which a broker-dealer may use electronic recordkeeping that is not WORM if the system maintains a complete time-stamped audit trail of any modifications, an electronic record of the original record, and appropriate access controls. 2. Organization and indexing, sufficient to permit the prompt retrieval of any particular record in a form that is readable and legible. 3. Duplicate copies maintained separately from the original. 4. Designated third party access arrangement: the broker-dealer must designate, and the designated third party must file an undertaking with the Commission, that such party has and will maintain the ability to download, print, and access the required records and provide them to the Commission staff on request. The 2022 amendments permit a senior officer of the broker-dealer to serve as the designated person, with an undertaking reflecting equivalent obligations. 5. Annual representation by an executive officer, attesting that the systems comply with the rule and that the broker-dealer maintains access procedures reasonably designed to ensure the records can be produced in the required format.