SEC Sets Effective Date for Updates to Electronic Recordkeeping Requirements

The effective date for amendments to the SEC broker-dealer and security-based swap dealer ("SBSD") electronic recordkeeping requirements will be January 3, 2023. The Notice was published in the Federal Register.

As previously covered, the final rule amends SEA Rule 17a-4 ("Records to be preserved by certain exchange members, brokers and dealers") and Rule 18a-6 ("Records to be preserved by certain security-based swap dealers and major security-based swap participants") to no longer require broker-dealers and SBSDs to maintain records in the "write one, read many" ("WORM") format to accommodate new technologies. The amendments replace the WORM format with an "audit-trail alternative" that allows the recreation of an original record in the event that it is damaged, altered or erased. The new reporting format gives broker-dealers more flexibility to configure electronic recordkeeping systems in a way that more closely aligns with contemporary industry practices, while still safeguarding original copies of the records, and the SEC said that these amendments make the rules more technology-neutral.