What are your Recordkeeping Obligations for 17 CFR 1.31?

10 Tips for Creating a Document Retention Policy
September 24, 2014
Meeting 17 CFR 45.2 Compliance Requirements
December 12, 2014
Show all

What are your Recordkeeping Obligations for 17 CFR 1.31?

Recordkeeping Obligations for CFTC 17 CFR 1.31

If you work in the futures or derivatives sector, you probably already know that you have recordkeeping obligations under 17 CFR 1.31. The obligations come from the CFR, which is the Code of Federal Regulations, and in this case, the regulations come from the Commodity Futures Trading Commission (CFTC).There is a lot to 17 CFR 1.31, and understanding what exactly those obligations are may be confusing, but we will hit on some of the highlights for you.

  • Paper records must be kept on paper and electronic records in their original file format for five years.
  • During the first two years, they must be readily accessible.
  • Records of swap or related cash or forward transactions must be kept for five years after the date of maturity, expiration, transfer, assignment, or novation date.
  • Records of oral communications must be kept for one year.
  • The records may be inspected by the CFTC or Department of Justice.
  • The person obligated to keep records (that’s you) is responsible for the cost of producing them.
  • Acceptable forms of storage are microfiche or similar format, or “electronic storage media.”
  • Electronic storage media must be, among other requirements, readily accessible and non-rewritable/non-erasable.
  • You must store a duplicate of the record, in any medium acceptable under this regulation, at a location separate from the original for the period of time required for maintenance of the original; and
  • You must organize and maintain an accurate index of all information maintained on both the original and duplicate storage media such that:
    • The location of any particular record stored on the media may be immediately ascertained;
    • The index is available at all times for immediate examination by representatives of the Commission or the Department of Justice;
    • A duplicate of the index is stored at a location separate from the original index; and
    • Both the original index and the duplicate index are preserved for the time period required for the records included in the index
  • People using electronic storage media must have written operational procedures and controls to ensure accountability of entry and change of the records.
  • If you use only electronic storage media, you must have an agreement with a third party technical consultant (Patrina) to ensure compliance with the rules.

The fact that you are responsible for the cost of producing the records is one important reason to have a reliable archival company. It is also required that you use a third party if you are going to store solely electronically and choosing the right company will minimize your costs over time. Contact Patrina for solutions specific for compliance with 17 CFR 1.31. We have over twenty years of experience helping the financial sector meet their compliant records archiving requirements, and we can make sure your firm is compliant with 17 CFR 1.31.