The last time I used a microfilm reader was in the dusty depths of my college library, reviewing newspaper clippings from the 1960s for some God-forsaken reason.
The windowless bunker looked and smelled as if it had been vacuum-sealed since the very period in history I was researching. Fast forward to today, when I perused Rule 204-2(g) of the Investment Advisers Act of 1940 (the “Act”), the rule that explicitly permits advisers to maintain their books and records in “micrographic media, including microfilm, microfiche, or any similar medium.”
Perhaps the SEC is taking the 1940 part of the Act’s title a little too literally…
To its credit, the SEC also explicitly permits books and records to be maintained via “electronic storage media, including any digital storage medium or system that meets the terms of [Rule 204-2(g)].” This definition is purposefully broad so that it can accommodate and exist in harmony with the Electronic Signatures in Global and National Commerce Act (“ESIGN”), passed in 2000. In general, the SEC permits electronic recordkeeping so long as it meets the requirements of Rule 204-2(g).
As a preliminary matter, an advisor should first take a step back and review the very long and very specific books and records that it is tasked with maintaining pursuant to Rule 204-2 of the Act.