The SEC Signals Recordkeeping Reform
SEC Signals Recordkeeping Reform: What We Know, What It Could Mean, and Why Firms Should Watch Closely
The U.S. Securities and Exchange Commission (SEC) has quietly put the most important topic of our industry back on the agenda: modernising electronic communications recordkeeping rules.
While there have been no formal rule proposals yet, a combination of industry requests, recent public statements from SEC Chairman Paul Atkins, and the publication of the SEC's 2026 Regulatory Flexibility Agenda suggest that recordkeeping reform is now an active area of work.
For organisations operating in regulated industries, particularly financial services, this is not a signal to change course - but it is certainly one to watch.
Why is this significant?
Electronic communications have changed dramatically since many of today's recordkeeping rules were written.
Employees communicate through Microsoft Teams, Zoom, Cisco Webex, mobile devices, messaging platforms and collaboration tools, while firms continue to operate complex hybrid estates that combine cloud services with legacy telephony and trading infrastructure. Yet many of the core SEC recordkeeping requirements still reflect a framework designed for a paper-based and telephone-centric era.
Recognising this, industry associations have spent the past year calling for the SEC to modernise its approach.
What has happened so far?
Several developments point in the same direction.
- Industry requests for reform
In October 2025, the Securities Industry and Financial Markets Association (SIFMA) asked the SEC to modernise communications retention rules applicable to broker-dealers, investment advisers and security-based swap dealers.
Among its recommendations were:
- clearer definitions of which electronic communications must be retained;
- modernisation of rules originally written for very different technologies;
- practical safe harbours to help firms demonstrate compliance;
- simplification of certain legacy recordkeeping requirements, including third-party undertakings for cloud storage providers.
More recently, in May 2026, the Investment Company Institute (ICI) and the Investment Adviser Association (IAA) submitted a joint letter supporting the modernisation of the Investment Advisers Act recordkeeping rule.
Importantly, the letter does not argue against recordkeeping itself. Instead, it asks the SEC to update a framework dating back to 1961 so that it better reflects today's digital communications while avoiding a strict liability approach that could penalise firms despite robust compliance programmes. Both letters share a common objective: modernisation and clarity rather than deregulation.
- The SEC has now acknowledged the issue
The publication of the SEC's 2026 Regulatory Flexibility Agenda provides the clearest indication yet that the Commission intends to review adviser recordkeeping requirements.
One of the listed rulemaking projects proposes amendments to Rule 204-2 under the Investment Advisers Act to reconsider the appropriate scope of required records; and
compliance burdens relating to electronic communications.
This follows comments made by the Director of the Division of Investment Management, who noted that the current rule still reflects "a paper-based mindset."
Separately, during a recent oversight hearing before the U.S. House Committee on Financial Services, Chairman Paul Atkins confirmed that SEC staff are actively reviewing the current recordkeeping framework. He described today's rules as a "crazy quilt of standards" across different types of regulated entities and indicated that staff are considering potential reforms.
Although no timetable was provided, these public statements demonstrate that recordkeeping reform has become an active policy discussion.
What could change?
At this stage, no formal proposals have been published. However, based on the regulatory agenda, industry submissions and recent public comments, several themes appear likely.
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Greater clarity
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Modernisation
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Harmonisation
One of the biggest challenges for firms is determining precisely which electronic communications must be retained across increasingly diverse communication channels. Greater regulatory clarity would likely be welcomed across the industry.
Rules originally designed around paper records and traditional telephony may be updated to better reflect cloud platforms, collaboration tools and modern digital communications.
Chairman Atkins' comments suggest the SEC is examining inconsistencies between different regulatory frameworks governing broker-dealers, investment advisers and other market participants. Whether that ultimately leads to greater harmonisation remains to be seen.
Regardless of how the rules evolve, firms continue to face significant operational challenges:
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communications spread across multiple platforms;
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hybrid cloud and legacy environments;
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growing volumes of digital communications;
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increasing expectations around governance and auditability; and
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the emergence of AI and advanced analytics, which depend on trusted data.
Modernising the rules is unlikely to reduce the need for strong communications governance. If anything, clearer expectations may place even greater emphasis on organisations being able to demonstrate that their communications are complete, governed and readily accessible.
At Custodia, we see these developments as part of a broader evolution in communications compliance. The discussion is moving beyond simple retention towards questions of data quality, governance, operational resilience and AI readiness.
Whether the SEC ultimately narrows, clarifies or harmonises recordkeeping requirements, organisations will still need to know:
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What communications they are required to capture.
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Whether every required communication has been successfully recorded.
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Where those records are stored.
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How quickly they can be retrieved.
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Whether the underlying data can be trusted for investigations, regulatory requests and future AI initiatives.
Those challenges remain technology and governance challenges as much as regulatory ones. As proposals emerge, we will continue to monitor developments and provide practical updates on what they mean for regulated organisations and communications compliance programmes.
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