May 24, 2018

Submitted via email: [email protected]

Brent J. Fields
Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re: Petition for Rulemaking to Amend Exchange Act Rule 17a-4(f) – ADDENDUM

Dear Mr. Fields,

The Securities Industry and Financial Markets Association (“SIFMA”)1, the Futures Industry Association (“FIA”)2, International Swaps and Derivatives Association (“ISDA”)3, and the
Financial Services Institute4(together, the “Associations”) respectfully submit this addendum (“Addendum”) to the petition filed with the Securities and Exchange Commission (“SEC” or
“Commission”) on November 14, 2017, pursuant to Rule 192(a) of the Commission’s Rules of Practice, to amend Rule 17a-4 under the Securities Exchange Act of 1934 (“Exchange Act”) (“Petition”). In the Petition, the Associations requested that the Commission amend Rule 17a4(f) to no longer require broker-dealers to implement a “non-rewriteable, non-erasable” or “write once, read many” (“WORM”) standard, notify their designated examination authority of their intent to use electronic storage, have an electronic records audit system, and employ a third-party downloader. The Associations are filing this Addendum with additional support for the Petition as requested by various Commission staff during meetings with the Associations since filing the Petition.

Although the staff has suggested that new guidance may be sufficient to achieve the goals of the Petition, the Associations continue to believe that these changes require a rule change to most clearly provide the necessary relief. The existing rule uses too many outdated references and standards that any corrective guidance would only further highlight the problems with this rule.

Specifically, the staff have asked for additional information on: (1) the types of alternative recordkeeping controls that would be used in place of a WORM compliant system; (2) the challenges of storing specific types of records required to be retained in WORM; and (3) the costs incurred by broker-dealers associated with implementing and maintaining the WORM.

Continue Reading >

1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 FIA is the leading trade organization for the global futures, options and over-the-counter cleared derivatives markets with offices in Washington, DC, London and Singapore. Its mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system and promote high standards of professional conduct. FIA’s core constituency consists of firms registered with the Commodity Futures Trading Commission as futures commission merchants (FCM). Many of these FCMs are also registered as broker-dealers with the Securities and Exchange Commission. The primary focus of the association is the global use of exchanges, trading systems and clearing organizations for derivatives transactions. FIA’s members include clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48 countries, as well as technology vendors, lawyers and other professionals serving the industry.

3 Since 1985, ISDA has worked to make the global derivatives markets safer and more efficient. Today, ISDA has more than 900 member institutions from 68 countries. These members comprise a broad range of derivatives market participants, including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure, such as exchanges, intermediaries, clearing houses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association’s website: www.isda.org. Follow us on Twitter @ISDA

4 The Financial Services Institute (FSI) is an advocacy association comprised of members from the independent financial services industry, and is the only organization advocating solely on behalf of independent financial advisors and independent financial services firms. Since 2004, through advocacy, education and public awareness, FSI has been working to create a healthier regulatory environment for these members so they can provide affordable, objective financial advice to hard-working Main Street Americans. For more information, visit www.financialservices.org