Books and Records
The Securities and Exchange Commission (SEC) in 2001 adopted amendments to its books and records rules—Rules 17a-3 and 17a-4—to clarify and expand firm recordkeeping requirements that cover purchase and sale documents, customer records, associated person records, customer complaint records and certain other matters.
The rule amendments, which became effective in 2003, also require firms to maintain or promptly produce certain records at each office to which those records relate.
Here are some of the records the SEC amendments require firms to make, among others.
- Order tickets
- Customer accounts
- Customer complaints of associated persons
- Associated person identification numbers
- Associated person compensation
- A list of principals of the firm
- Office records
In addition, the SEC rules require firms to furnish each customer who opens an account with a copy of the account record within 30 days of the opening of the account, and at least every 36 months after that. The account record includes the customer’s personal information, annual income and net worth, as well as the customer’s investment objectives.
Records Firms Must Preserve
The SEC also requires firms to maintain and preserve the following records.
- Communications with the public, including all communications received and sent relating to the firm’s business.
- Organizational documents, such as all partnership articles or, if a corporation, all articles of incorporation or charter, including minute books and stock certificate books, among others.
- Special reports, such as each report that a securities regulatory authority has requested or required a firm to make and furnish pursuant to an order or settlement.
- Compliance, supervisory and procedures manuals, including any updates, modifications and revisions to each manual.
- Exception reports produced to review unusual activity in customer accounts.
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