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Security & Compliance

FINRA Compliant Document Storage & File Sharing

How does SmartVault support you in complying with FINRA rules?
As your trusted online document storage provider, SmartVault provides industry standard security measures such as encryption, authentication, access controls, and auditing to support compliance with FINRA rules for the financial services industry.

Frequently Asked Questions

SmartVault Supports Your Compliance Efforts

It is important to remember that FINRA compliance is a securities firm obligation, not a technical specification. So when we say that SmartVault supports a FINRA compliant workflow, what we mean is that our service gives you the tools that securities firms like yours need in order to work in a compliant fashion. While we are not a FINRA compliance consulting firm, we are happy to assist you in getting pointed in the right direction.

What are FINRA rules?

The FINRA (Financial Industry Regulatory Authority) rules are a set of industry requirements detailing the need for financial and securities firms to develop, implement, and maintain administrative, technical, and physical safeguards to protect the security, integrity, confidentiality, and timely retrieval of financial and account specific documentation.

Who has to comply with FINRA?

Under FINRA Rule 3190, the compliance burden is placed on the member financial or securities firm for any work or services for which they use a third-party service. This means that those firms will be very involved in evaluating and examining the qualifications and competencies of all of their service providers.

So, while the burden for compliance does not rest with you as a non-securities firm, an understanding of the FINRA Rules and how they apply to your business can create a significant business advantage in working with financial and securities firm customers. This is especially true for those anyone working in the document storage and retrieval space, as well as data backup and recovery.

What if you fail to comply with FINRA rules?

Under FINRA, penalties for non-compliance have resulted in large fines, and the regulatory group has been raising these penalties even higher over time. Pershing LLC was fined $3 million for violating the Customer Protection rule and associated supervisory failures1; Morgan Stanley Smith Barney was fined $800,000 for failing to issue account statements and confirmations for numerous customer accounts and transactions.2 In addition, banking and securities firms can be expelled from FINRA membership and officers and employees can be barred from working in the securities industry.3

  1. FINRA Fines Pershing LLC $3 Million for Customer Protection Rule Violations and Supervisory Failures
  2. FINRA Fines Morgan Stanley $800,000 for Deficient Conflict of Interest Disclosures in Equity Research Reports and Public Appearances by Research Analysts
  3. FINRA News Releases