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A policy defines which documents are to be archived and how they are to be archived.
In a SharePoint policy you can configure the following archiving actions:
Leave the document in SharePoint. This means that the document will not be deleted from SharePoint once it is archived; users will be able to access all versions of the document both on the server and in the archive.
Delete document from SharePoint once archived, and leave a shortcut to the archived document.
Delete document from SharePoint once archived, without leaving a shortcut. This means that an archived document is deleted from SharePoint and is only available in the archive.
Prune to a specified number of versions of the document. If versioning is enabled for the document library, you can set the number of versions of an archived document that you want left in SharePoint after archiving. Earlier versions will be available in the archive only.
When archiving from SharePoint 3.0, you can specify how to archive items with unique permissions and whether to archive drafts of items.
You create rules to select the documents that you want to archive with the policy.