Finra Approved Cloud Storage Options
Understanding Finra’s Data Storage Requirements
The Financial Industry Regulatory Authority (Finra) has specific requirements regarding data storage and retention for financial services firms under its jurisdiction. Finra Rule 4511 mandates that member firms must preserve records related to their business activities and communications. This includes emails, instant messages, phone calls, and other communications.
Finra rules also require that financial services firms store these records in a non-rewriteable and non-erasable format. This is commonly referred to as WORM (Write Once, Read Many). The records must be preserved for at least three years for brokers and six years for broker-dealers.
Cloud Storage Considerations
Many financial services firms are turning to cloud storage to meet their data retention and security needs. However, not all cloud storage providers are suited for highly regulated industries like financial services. Finra has strict requirements regarding data security, accessibility, and integrity.
When evaluating cloud storage providers, financial firms should look for offerings that provide:
– Encryption in transit and at rest
– Access controls and permissions
– Compliance with SEC 17a-4(f) (electronic storage media requirements)
– Integration with supervision tools
– Tamper-proof, time-stamped audit trails
– Backup and disaster recovery capabilities
– Ability to place legal holds on data
Finra Approved Cloud Storage Providers
There are a few cloud storage providers that meet Finra’s requirements and have been vetted for use by member firms:
Zoom
Zoom offers a cloud storage solution called Zoom Archive that is designed specifically for SEC 17a-4(f) compliance. It provides immutable data retention, encryption, access controls, and chain of custody reporting.
Global Relay
Global Relay Archive is another popular choice that meets Finra and SEC regulations. It offers message retention, surveillance, and e-discovery capabilities. Global Relay has over 20 years of experience working with regulated financial institutions.
Proofpoint
Proofpoint Enterprise Archive is built for regulated industries. It enables capture, retention, and supervision of communications data. Proofpoint also provides analytics to help reconstruct communication histories for compliance audits and investigations.
Smarsh
Smarsh offers fully compliant electronic communications archiving for financial firms. Its cloud archive has advanced regulatory search and reporting capabilities tuned for e-discovery events. Smarsh stays continuously up-to-date with evolving regulations.
The Bottom Line
Financial services firms looking to move to the cloud need to choose FINRA approved providers that enable compliance with regulations for recordkeeping, retention, security, and supervision. Solutions like Zoom Archive, Global Relay, Proofpoint, and Smarsh are designed specifically to meet regulatory requirements for financial services.
Expanded Discussion on Encryption and Security
Encryption Best Practices
Finra approved cloud storage solutions should utilize encryption both in transit over networks and at rest in storage. Encryption protocols like AES-256, SSL/TLS provide robust data security. Proper key management protocols are also critical.
Access Controls
Granular access controls ensure data is only available to authorized personnel. Role-based access and multi-factor authentication add additional layers of security. Audit logs provide visibility into data access.
More on Supervision and Compliance Capabilities
Content Supervision
FINRA approved cloud archives allow compliance teams to monitor for prohibited activities like insider trading. Tools like keyword spotting, lexical analysis, and sentiment analysis help detect risky behavior.
Audits and Investigations
Cloud archives maintain complete audit trails for e-discovery events. Advanced search, data analytics, and reporting simplify compliance audits, internal investigations, and legal discovery requests.
Disaster Recovery and Business Continuity
Backup and Redundancy
FINRA approved solutions provide continuous data backup and redundancy across multiple data centers. This guards against data loss in case of localized component failure or disaster.
Availability and Recoverability
Leading solutions offer extremely high availability, with some quoting guaranteed 100% uptime. Easy failover and backup restoration ensures organizations can continuously access their data.
