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17a-4 expands Designated Third Party review to include regulatory e-discovery best practices and procedures

January 27, 2016

17a-4 provides Designated Third Party services for hundreds of broker dealer clients.  Complementing the annual electronic records retention review, 17a-4 now examines the broker dealer’s e-Discovery search, review and production procedures. 

Millbrook, NY – 17a-4 has improved its Designated Third Party (D3P) service offering to incorporate e-discovery best practices.  Annually, 17a-4 reviews with broker dealer clients the processes and procedures involved in searching, reviewing and exporting records to such regulators as the SEC, FINRA and CFTC.  The expanded review now includes an analysis of client’s e-discovery procedures to ensure searches and productions are in accordance with industry and e-discovery best practices.

Under Rule 17a-4(f)(3)(vii), a broker dealer’s D3P is required to be able to respond to regulatory requests.  This often involves exports from an email archive, from fileshares, and from document management systems such as Microsoft’s Sharepoint, IBM’s FileNet, OpenText, SQL databases and other records platform.  As an enhancement to the current annual review, 17a-4 will examine the production methodology and export formats.

Critical to an effective production are such issues as:

  • Limiting productions to only responsive records of the broker dealer
  • Culling for privileged emails and creating regulatory privilege logs
  • Normalizing custodial information so that such information as Bloomberg emails are associated with the correct corporate email address
  • Filtering regulated from non-regulated users
  • Formatting and exporting records from email archives, document repositories or SQL databases as required by the Securities & Exchange Commission’s Enforcement Manual and other regulatory formats

“As part of our D3P service and obligations of our Letter of Undertaking, we are in a position to review the e-discovery, hold, review and export processes in a broker dealer.” says Katherine Hayes, Director of Business Development for 17a-4, llc. “We find that most of our clients now handle e-discovery processes in house with such tools as Veritas’ Discovery Accelerator and EMC’s Discovery Manager.  Which means that they have assumed control of what used to be done by the broker dealer’s outside counsel.  As we work on many such productions, we are in the position to offer advice without having the broker dealer incur the costs associated with duplicative outside productions.”