OSI's Services Ensure Compliance

In 1993 the SEC amended its record preservation requirements to allow broker-dealers to rely on optical disk technology for storage of vital records, allowing firms to improve records management operations by switching away from paper, microfilm and/or microfiche. These requirements have been amended several times since then. They now include that certain e-mail records also be maintained and accessible as per the original requirements for confirmations, etc.

The SEC has strict requirements for a broker-dealer that utilizes electronic storage media to maintain records pursuant to securities laws. OSI acts as a third party download provider using WORM technology as outlined in the Supplementary Information under Section II (Description of Rule Amendments); Paragraph E (Third Party Down-Load Provider). The undertakings OSI makes to the SEC are specifically set forth in Rule 17a-4 (f) (vii).

Summarized below are the essential SEC Rules and Conditions involving third-party obligations related to broker-dealer use of optical disk storage technology. These relate to independent third party "Download on Demand." For additional information on all Rules and Conditions, visit the SEC site at www.sec.gov


The broker-dealer must arrange for at least one third party to have the ability to download information from the broker-dealer's optical storage unit to another acceptable medium. The third party is required, among other things, to file a statement with the SEC promising: 1) to provide promptly upon reasonable request to the SEC (or its designees or representatives) information deemed necessary by the SEC to download from the relevant optical storage disk; and 2) to take reasonable steps to provide access to information contained on the broker-dealer's optical storage system, including, as appropriate, arrangements for the downloading of any record required to be maintained under the Act in a format acceptable to the SEC's staff.


The arrangement must provide specifically that in the event of a failure by a broker-dealer to download information into a readable format, upon being provided with the appropriate disks, the third party will download the information at the request of the SEC.