Toronto, ont, September 8, 2012 (Newswire.com) - The D3P regulation causes huge problems for small FINRA firms because they don't have the budgets to spend thousands of dollars a year to hire a provider to simply archive their data.
Thankfully FINRA gives its smaller member's some flexibility when choosing the D3P and firms have a certain amount of control over who they assign this task. Surely, they will want to choose a provider that offers a comprehensive yet inexpensive solution, but at the same time meets all the important demands for regulators.
To achieve this regulation, small firms must understand that they need a provider who can capture a multitude of different data formats from various systems, consolidate it into one easily accessible platform, and make it readily available to compliance officers at any time. In addition, they need a provider who allows them to control the cost of the service as they grow; small firms surely can't spend thousands of dollars a year archiving data to simply keep auditors happy.
Nonetheless, a small firm should look for three important features in a D3P:
1. Remote Data Archiving. The best way for small firms to achieve the D3P requirement is to choose a provider that offers remote data archiving. This means the provider uses an automated method to remotely transfer data from critical systems each night. It will then keep this data archived in a secondary location for the required amount of time. This type of service is
perfect of small firms because it is a ready-made solution which can be put in place very quickly to instantly ensure data is transferred off-site, from every location and put in the possession of a third party provider for FINRA compliance and long term electronic records archiving.
2. At Flight and At Rest Data Encryption. Because a financial firm's electronic records are so sensitive, auditors will want firms to choose a D3P that offers at Flight and At Rest Data Encryption. Essentially, this technology will be built into the providers software and encrypts the data before it leaves the customer's site and while it is stored on the providers servers. This way even the technicians working for the provider cannot access the data
3."Pay-As-You-Grow" Pricing Model. Small FINRA firms such as broker-dealers will want a provider that offers a Pay-As-You-Grow pricing model. By doing this, they are able to control the cost of data compliance because in the beginning they are only paying for data that needs archiving, and as data increases the cost goes up. This way, the initial cost is low and as they grow, they can pay more for protection to keep the overall cost of the service under control over time.
Because FINRA performs regular audits of its members and data compliance is such an important part of this, choosing the D3P is a very important decision for FINRA firms, especially for small firms. The D3P will ensure data is properly accessible for review from auditors, also the right provider will also remotely backup and archive data to a remote location, making sure the electronic records and archiving demands of rules 17a-3 and 17a-4 are also achieved. Moreover, by choosing a provider that offers the above key features firms will be able keep the cost of data compliance under control and ensure they achieve several critical data compliance rules at once.
AdvisorVault, http://www.advisorvault.org offers the only designated third party service designed for small FINRA firms such as broker-dealers, independent investment advisors and wealth management firms. Our solution is suited specifically to help them achieve today's stringent data archiving rules while helping them keep the overall cost of data compliance under control. With our turnkey D3P service, firms are assured to achieve the demands defined in the 17a-3 & 17a-4 electronic records archiving rules as well as the supervisory and disaster recovery demands contained in FINRA rules 3510 and 3010.
Allan Lonz, President
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Original Source: Tips for Choosing the Designated Third Party (D3P) Service for Small FINRA Firms