With the start of a new year, many firms are eager to “clean up” and store away documents from prior years. This always brings questions about which documents need to be kept and for how long. The following information is designed to help identify the basic requirements for member broker-dealers under the FINRA recordkeeping requirements and the SEC books and records rules.
Formation and Organizational Documents:
Retention Period: Life of the broker-dealer and of any successor broker-dealer
This includes the following types of documents (although it may not be all inclusive):
-
Board of Director’s Minutes
- Membership Agreement
-
Stock Certificate Books
-
Partnership Articles and/or Articles of Incorporation
-
All Forms BD and BDW, including all amendments thereto, and all licenses or other documentation showing registrations with any securities regulatory authority.
Office Records:
Retention Period: Three years; during the first two years the records must be kept in a readily accessible place
Includes the following:
-
Order Tickets
-
Confirmations
-
Checkbooks, Bank Statements
-
Trial Balance
-
Subsidiary Records
-
FOCUS Reports
-
Examination Reports
-
Correspondence (includes email)
-
Customer Complaints (includes evidence of providing customer with the complaint disclosure notice)
-
Option Records
-
Communication Records – includes (and must be retained for three years from the date of last use):
- Advertising
- Sales Literature
Retention Period: Six years; during the first two years the records must be kept in a readily accessible place
Includes the following:
-
Blotters
-
General Ledger
-
Security Position Records (each long and short position)
-
Customer Ledgers
Compliance Manuals:
Retention Period: Three years after the termination of use of the manual
Firms must keep copies of each compliance, supervisory, and procedure manual, including any updates, modifications, and revisions, which describe the policies and practices of the firms with respect to compliance with applicable laws and rules, and supervision of the activities of associated persons. This includes supervisory procedures, supervisory control procedures, training plans and other procedural manuals maintained by the firm relative to its business.
Associated Person Records:
Retention Period: Three years after the associated person has terminated employment and all other connections with the firm
Includes:
-
Employment Applications for Associated Persons
-
Forms U4, U5
-
Copy of Fingerprint Card
-
Record of their CRD number and any internal identification number or code assigned by the firm
-
Evidence of verification of three years of employment
-
Form U5 from prior firm (if applicable)
Associated Person Compensation Records:
Retention Period: Three years; during the first two years the records must be in an easily accessible place
Includes:
-
Registered Representative Documentation
-
Agreements
-
Office Location Information
-
Commission/Compensation Runs
Customer Account Records:
Retention Period: Six years after the closing of the account or the date on which the information was replaced or updated, whichever is earlier
This would include new account forms or other account/relationship opening documents that include information as required in SEC Rule 17a-3(a)(17), documents evidencing the broker-dealer updated account information at least every 36 months, records of changes in address or investment objective, and any customer agreements and evidence copies of such that were provided to the customer.
If you have questions regarding the books and records rules, please contact your Compliance Partners account manager or one of the compliance specialists at Regulatory Compliance at 603-434-3594.
Back to top
Back to Newsletter
|
