Finra Approved Cloud Storage – What You Need to Know
Understanding Finra’s Data Storage Requirements
The Financial Industry Regulatory Authority (Finra) has specific rules regarding how financial services firms store data and records. Finra Rule 4511 requires member firms to preserve books and records in a non-rewriteable and non-erasable format. This means firms cannot use storage solutions that allow data to be overwritten or deleted. Finra also requires member firms to store records in a way that allows timely retrieval when requested. This necessitates using indexed and searchable storage systems.
Choosing a Compliant Cloud Storage Provider
Many financial services firms want to leverage the cost and efficiency benefits of cloud storage. However, not all cloud storage providers are Finra compliant. When evaluating cloud storage vendors, firms should ask the following questions:
– Does the provider meet SEC data storage requirements for non-rewriteable, non-erasable (WORM) storage?
– Does the provider allow indexing and timely retrieval of records?
– Does the provider offer robust security protections like encryption and role-based access controls?
– Has the provider achieved SOC 2 or comparable third-party security audits?
– Does the provider guarantee 99.9% or greater uptime and availability?
– Does the provider have experience serving financial services clients?
Firms should obtain satisfactory answers to all of these questions before selecting a cloud storage vendor.
Examples of Finra Approved Cloud Providers
There are several leading cloud storage vendors that offer Finra compliant solutions:
– AWS – Amazon Web Services provides fully managed cloud storage with features like immutable storage, versioning, and records retrieval. AWS has achieved numerous compliance certifications.
– Microsoft Azure – Azure offers WORM storage accounts along with security capabilities like encryption and RBAC. Azure meets a broad array of compliance standards.
– IBM – IBM Cloud includes WORM storage options that prevent data tampering. IBM also provides advanced security and has in-depth financial services experience.
– Oracle – The Oracle Cloud Infrastructure provides immutable blob storage ideal for Finra compliance. Oracle has decades of experience serving regulated industries.
– Google Cloud – Google Cloud Storage offers retention policies and append-only buckets meeting Finra’s rules. Google Cloud meets rigorous third-party security and compliance audits.
Best Practices for Implementation
When implementing Finra approved cloud storage, firms should take steps like:
– Performing extensive due diligence on potential vendors
– Working closely with the provider during onboarding
– Configuring storage buckets properly for immutability and retention rules
– Setting up user access controls and multi-factor authentication
– Enabling logging/auditing of all storage activities
– Testing retrieval of archived records
– Maintaining complete storage documentation for audits
– Staying up-to-date on the provider’s compliance programs
Following best practices allows financial firms to benefit from cloud storage while ensuring full compliance with Finra regulations.
Understanding Finra’s Data Storage Requirements
Immutability
Finra’s immutability requirement prevents firms from editing or deleting records after they are stored. This supports data integrity and prevents tampering. Cloud solutions must prevent any ability to overwrite or erase data.
Timely Retrieval
Finra rules state that firms must be able to promptly retrieve records when requested. This necessitates indexed, searchable data. Cloud storage should enable powerful search, eDiscovery, and data export capabilities.
Choosing a Compliant Cloud Storage Provider
Data Residency
Firms should confirm where their data will be physically stored by cloud providers. Data must remain within required geographical boundaries.
Access Logging
Cloud vendors should provide comprehensive logging of all access requests and data actions. This supports auditing and regulatory oversight.
Best Practices for Implementation
Testing Backup and Restoration
Regularly performing test restores from cloud archives is critical to ensure recovery readiness. This validates backup integrity and processes.
Ongoing Vendor Review
Firms should review cloud provider security and compliance continuously, not just during initial vetting. New vulnerabilities or audit findings must be evaluated.
