Little more input on audit function under electronic r/k rule

Quick--I promise--update on the 'audit function' under 17a-4(f)(3)(v). This week a FINRA examiner provided verbal guidance in response to a firm's written request for such. The guidance was not specific; it was based only common sense, not formal guidance from SEC or FINRA higher-ups. It consisted of recommending a periodic review of stored records to confirm that they are intact.

Okay then.

Obviously more on this subject is necessary for firms to fully understand their responsibilities.

AND...I came across another outside vendor for e-mail archiving: Global Relay Communications. I haven't gotten permission to link to them--please google them and check out their broker-dealer services. They seem quite thorough in their comprehension of FINRA members' regulatory burdens. Their materials plainly address all requirements and describe how their systems meet them... nice to see. Here's an excerpt from their presentation on the audit function (okay, I didn't get permission to copy this--but I'm hopeful the G.R. folks will appreciate the plug):

"All messages stored in the Message Archiver are forwarded directly from the Member firm’s email server, with no User intervention. During the lifecycle of a message, all actions (viewing, replying, forwarding, downloading, flagging, notation, review) by any User, Reviewer, Super Reviewer, Administrator or the system itself associated with the message are logged. The Message Archiver’s detailed logs provide a full audit trail verifying the integrity of the message. These logs automatically appended to the messages and are viewable and made available to authorized administrative Users.

As detailed directly above, Message Archiver immediately provides a full audit trail accessible to any authorized administrative User. A side benefit of the system, is that a firm also builds an audit trail for the auditors actions in the archive during an online audit.

Global Relay’s Message Archiver employs retention schedules for all audit results. Audit results are retained for the lifecycle of the message. The SEC three and six year retention requirement for records set out in paragraph (a) and (b) of this Rule 17a-4 can be applied to the audits within Message Archiver."

Happy Summer!