Questions and Answers
Which of the following records must be kept by a broker-dealer firm for six years? (Select all that apply)
Under the Securities Exchange Act of 1934, registration is required for which of the following?
Broker-dealers that transact securities business with customers or other broker-dealers must apply and be approved for registration with which entity?
Broker-dealers who transact securities business with other broker-dealers or customers must be registered with which body?
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Which of the following items are required to be kept for more than three years? (Select all that apply)
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All of the following are self-regulatory organizations (SROs) in the securities industry except:
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How long did Seacoast need to maintain the record of Dwight's principal designation?
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Amendments to articles of incorporation are kept for how long?
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If an arbitration agreement has not been signed, under which two circumstances would a dispute between a FINRA member firm and a retail customer go to arbitration? (Select two)
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Study Notes
Record Keeping Requirements
- Broker-dealer firms must retain customer new account forms and stock records for a period of six years.
- Minute books showing directors' meeting minutes are considered lifetime records.
- Advertising materials only need to be kept for three years.
Securities Exchange Act of 1934
- Registration is mandatory for broker-dealers and domestic exchanges under the Securities Exchange Act of 1934.
- The Securities Act of 1933 requires registration for securities and initial public offerings (IPOs).
- The SEC does not regulate foreign securities exchanges.
Registration with SEC
- Broker-dealers that engage in securities business are required to apply for and obtain registration from the SEC.
- The SEC is the main regulatory authority for the securities industry.
Self-Regulatory Organizations (SROs)
- Broker-dealers must be registered with the SEC to conduct business with other broker-dealers or customers in the securities market.
- FINRA, MSRB, and other exchanges operate as self-regulatory organizations and are accountable to the SEC.
Record Retention of Designation
- Principal designations must be maintained for six years after the principal's term ends.
- For example, Dwight's records needed retention until 2018, six years after his departure in 2012.
Amendments to Articles of Incorporation
- Amendments to a company's articles of incorporation must be stored indefinitely for the life of the company.
Arbitration Agreements
- If no arbitration agreement is signed, disputes between FINRA member firms and retail customers may go to arbitration if unresolved and if the customer requests it.
- Disputes can also be arbitrated if the FINRA director of arbitration rules on it, regardless of the amount in dispute, as long as the customer initiates the arbitration.
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Description
Test your knowledge on the recordkeeping regulations for broker-dealer firms. This quiz covers essential records that must be maintained for six years, including customer new account forms and stock records. Challenge yourself and ensure you understand these important compliance requirements.
