SEC Keeps Broker Record Rules Amid Fewer Firms
Published Date: 9/29/2025
Notice
Summary
The SEC is asking for comments on extending Rule 17a-4, which makes broker-dealers keep important business records for set times, including electronic copies. About 3,300 broker-dealers must follow this rule, spending millions of hours yearly on recordkeeping, but the total time needed just dropped thanks to fewer firms and some rule changes. No new fees, just a heads-up to keep those records safe and sound!
Analyzed Economic Effects
6 provisions identified: 0 benefits, 6 costs, 0 mixed.
Large annual recordkeeping hours
If you run a broker-dealer, Rule 17a-4 requires preserving many business records and the SEC estimates about 3,298 active broker-dealers each spend an average of 254 hours per year. The Commission totals this as 4,772,698 hours per year and says the total burden decreased by 4,527,481 hours because respondents fell from 3,508 to 3,298 and an initial burden for broker-dealers with retail customers was removed.
Annual document storage cost
The SEC estimates the average broker-dealer spends about $5,000 per year to store documents required under Rule 17a-4. With 3,298 active broker-dealers, the Commission estimates an industry-wide annual reporting and recordkeeping cost of $16,490,000.
Phone-recording retention for SBSDs/MSBSPs
For broker-dealer SBSDs and broker-dealer MSBSPs, paragraph (b)(4) of Rule 17a-4 imposes a one-time initial burden of 13 hours per firm in the first year and an ongoing burden of 6 hours per year. The SEC estimates 3 new SBSDs over three years, currently eight SBSDs/MSBSPs, and an industry-wide ongoing annual cost of about $2,000 per applicable firm (8 respondents = $16,000 total).
Security-based swap recordkeeping burdens
Provisions tied to security-based swap activities (paragraphs (b)(1), (b)(8)(v)-(viii), (b)(8)(xvi), and (b)(14)) impose an initial burden estimated at 65 hours per firm in the first year and an ongoing burden of 30 hours per year. The SEC estimates three new respondents over three years and provides industry annualized burden and cost estimates (for example, an ongoing cost of about $600 per firm for certain respondents, with 33 respondents = $19,800).
Estimated internal compliance labor cost
The SEC estimates recordkeeping tasks are performed by compliance staff and uses a Compliance Clerk wage of $78 per hour to calculate a total internal cost of compliance of approximately [$699] million (based on 9,983,015 hours x $78).
Electronic recordkeeping transition burdens
Changes from the 2019 and 2022 amendments to Rule 17a-4 (electronic storage, backup sets, access/undertakings, audit trails, and cloud undertakings) lead to one-time and ongoing burdens: the SEC estimates 100 firms will register over three years and cites a one-time burden of 100 hours (33.33 hours annualized) for replacing third-party access requirements, a one-time 1-hour burden for 5 broker-dealers (5 hours total, 1.67 annualized) for the alternative electronic recordkeeper undertaking, and a one-time 100-hour burden for one cloud service provider (33.33 annualized).
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