What is the most effective way of storing documentation required for an e-dealing Compliance Review?

There are several different methods that firms have adopted for storage and retrieval of documentation for e-dealings. It largely depends on firms¡¦ historical practices.

Examples of Retention Methods:

1. Separate folder

Firms that have historically stored their abstracts in a separate folder have adopted a similar approach for the Client Authority and Instruction form (A & I) and its attachments. The A & I is placed in a separate folder in chronological sequence. While it is not necessary, some firms copy the A & I for the file as well. This is probably appropriate in the case of a mortgage as the full letter of instruction from the mortgagee should be annexed to the A & I as proof of the authority from the mortgagee to create the mortgage.

2. On file only

Given that there is usually only a sample of a few dealings per year selected for Review, some firms have retain everything on file, without separating the compliance Review documentation. Their rationale is that the additional time taken to retrieve those files is less than copying and separately storing the A & I forms. This would probably depend upon whether storage is on or off site. If it is off site, it may be more efficient to have a separately held folder of A & I forms on site.

3. Deeds
The most risk averse approach is to hold the A & I in Deeds. This approach is beyond what the legislation or NZLS Guidelines require. Once e-dealings become mandatory the Deeds storage would become significant and make the practical option of purging files after the prescribed retention period more difficult.

4. Scanning
Firms that already have adopted scanning of all files for storage are scanning the A & I and copying to a separate electronic folder.

Summary

The volume of transactions selected for compliance review is small. If your client files are readily accessible on site for at least six months after closure of the file, that should suffice without the need for holding the A & I separately. If you are already set up to scan your files then that option could be used for the A & I.

There are variations on the above options and it comes down either to what works best with your current system or whether now is the time to review that.