Series 79 practice questioneasyBooks and Records Requirements
If a firm stores its books and records electronically, which of the following is a required condition under SEC Rule 17a-4?
- APhysical backup in a different state
- BEncryption is required at all times
- CWORM/audit trail plus access and reproduction✓ Correct answer
- DRecords must be posted to the SEC’s EDGAR system
Explanation
Why C — WORM/audit trail plus access and reproduction
Since the 2022 amendments, Rule 17a-4 permits either WORM storage or an electronic recordkeeping system with a complete time-stamped audit trail meeting the rule.
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