The "business as such" rules provided me much discussion, in a past
position, with my bosses and counsel. I worked in an organization regulated
by SEC Rules 17a-1, and 17a-6, and questions arose as we discussed proposed
retention schedules.
For example, did our security video recordings on the DVRs in our security
offices constitute records of our "business as such" as a national
securities association and SRO, or were they just part of being in business
in general and securing our property, were our building and space plans
"business as such?"
Obviously functions such as enforcement, member regulation, and market
regulations are considered "business as such." As for those others.
Another interesting point was that the SEC wanted us to retain ALL e-mails
for five years. We tried to explain how those other "personal" and
non-record messages would be retained, but.We did make it a point to
prohibit as a matter of RM and Information Security policy, in almost all
cases, the use of IM for business communication.
Tod Chernikoff, CRM
-----Original Message-----
From: Records Management Program [mailto:[log in to unmask]] On Behalf
Of Patrick Cunningham
Sent: Wednesday, December 20, 2006 2:28 PM
To: [log in to unmask]
Subject: Re: [RM] FW: NYTimes.com: Regulator Says Morgan Stanley Withheld
E-Mail in Cases
The other relevant part of 17a is the statement "business as such". Because
the SEC has taken such a dim view of organizations which have discarded (or
not properly retained) communications pertaining to "business as such", many
people have interpreted 17a to require retention of ALL COMMUNICATIONS,
simply because of the difficulty of filtering out "business as such" from
all other communications (and maintaining a clear evidence trail that proves
that the communications have not been tampered with). If you read this SEC
ruling: http://www.sec.gov/litigation/admin/34-46937.htm you can see why
people have their shorts in a knot and take a very conservative view on
this.
The problem is the seeming inflexibility of the rule -- "business as such",
non-erasable media, all communications, etc. -- and the subsequent rulings.
While certain technologies would allow greater flexibility and appropriate
weeding of non-relevant communications, once something is captured by these
systems, they are going to hang
around for the required time period. That means that many organizations have
even turned off spam filters for fear that something that could be
considered "business as such" would be discarded inadvertently. What this
also starts to run smack up against are privacy considerations. If all
communications are retained, there will be circumstances where
communications of a purely personal nature are going to get captured,
regardless of proscriptions against use of corporate communications
systems for personal business. When 17a runs up against more restrictive
personal privacy laws and regulations, things will get interesting.
Patrick Cunningham, CRM
Patrick Cunningham, CRM
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"Those who would give up essential liberty to purchase a little temporary
safety deserve neither liberty nor safety."
Benjamin Franklin, Historical Review of Pennsylvania, 1759
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