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Why examiners care
What changed
- Cloud and other electronic storage explicitly permitted with specific safeguards.
- Removal of the strict WORM (write-once, read-many) requirement for many record types.
- Requirement that records be reasonably accessible — searchable, retrievable, and producible on demand.
- Requirement that the system have controls preventing unauthorized alteration or destruction.
What an electronic system must demonstrate
- Tamper-evident storage with audit trails of any changes.
- Indexing for prompt retrieval — examiners must be able to find a specific record quickly.
- Periodic verification that the system is working as intended.
- Retention controls aligned with each record category's required period (typically five years).
- Ability to produce non-rewriteable copies on request.
What this enables
Most modern compliance and document-management platforms can satisfy the new requirements. The shift from WORM-only storage means firms no longer need legacy proprietary archiving systems for many record categories — cloud platforms with the right controls qualify. This reduces cost and improves searchability.
Common deficiencies after the amendments
- Migration from legacy WORM to cloud without verifying that the new platform meets the modernized requirements.
- Records technically in cloud storage but with no indexing — search times unacceptable to examiners.
- No periodic verification that the cloud platform is preserving records correctly.
- Vendor changes without ensuring continuity of historical records.
How StratiFi thinks about records modernization
The modernization is an opportunity, not a burden. The firms that benefit most are the ones who took the amendments as an excuse to consolidate fragmented record stores into a single searchable platform — improving both compliance and operational efficiency. The compliance test is producibility: can any required record be produced quickly, accurately, and provably unchanged?
Frequently asked questions
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Can advisers use Google Drive or SharePoint for records?
In principle yes, if the implementation includes the required controls — tamper-evidence, indexing, retention, audit trails, producibility. Most enterprise configurations can be made compliant; default consumer configurations typically cannot. -
Is WORM storage still required for any records?
Some categories, particularly trade-related records for broker-dealers under SEA Rule 17a-4, still have specific WORM-equivalent requirements. The 2024 amendments mostly affected adviser records under Rule 204-2. -
How quickly do examiners expect record retrieval?
Records produced "promptly" — typically within a few days for routine requests. Records that take weeks to retrieve are themselves a deficiency, regardless of whether the records exist.