Broker-dealers are required to keep certain books and records on file. If a problem comes up during a customer interaction or in the firm’s business operations, those records help show what happened and when it happened.

Retention periods range from 3 years to the lifetime of the firm, depending on the type of record. These are the requirements to know for the exam.

3 years

These records typically relate to customer communications and employee records. The documents that must be kept on file for at least 3 years include the following:

• Employee records
  • Form U-4
  • Form U-5
  • Fingerprint records
• Trade confirmations
• Statements
• Public communications
  • Correspondence
  • Retail communications
  • Institutional communications
• Trial balances*

*Trial balances list all credits and debits (money in and money out) related to the broker-dealer’s business. Here’s an example. You don’t need to know the details for the exam - just that trial balances have a 3-year retention requirement.

4 years

There’s only one item with a 4-year retention requirement: customer complaints.

Complaints can be tricky because the retention period depends on which regulator the question is asking about:

• FINRA (or general): 4 years
• MSRB: 6 years

Here are examples of how this shows up on the exam:

According to FINRA rules, how long must broker-dealers maintain complaints on file?

Answer: 4 years

You may also see:

According to MSRB rules, how long must broker-dealers maintain complaints on file?

Answer: 6 years

The key point is that the two regulators use different time frames, and it’s testable.

5 years

A few documents require a 5-year retention period, and they all relate in some way to anti-money laundering (AML):

• Currency transaction reports (CTRs)*
• Suspicious activity reports (SARs)*
• Customer identification program (CIP) information

*You’re unlikely to see detailed questions on CTRs or SARs here, but you may recognize them from SIE prep. CTRs are filed when a person completes a cash transaction exceeding $10,000. SARs are filed when a customer’s activity appears suspicious and may involve illegal activity (e.g., money laundering).

6 years

Most documents have a 6-year retention period, and they generally relate to customer or trade records:

• Customer account records
  • New account forms
  • Customer agreements
  • Trading authorization forms
• Customer complaints (MSRB)
• Blotters*

*Blotters are internal trading records that track the securities the broker-dealer bought and sold on a given day. You don’t need the details for the exam - just that blotters have a 6-year retention requirement.

Lifetime

Some documents must be kept for the lifetime of the firm. These records relate to the firm’s structure and ongoing operations.

• Stock certificates
• Partnership agreements
• Articles of incorporation
• Meeting minutes

A common memory aid is the acronym SPAM. (Like Spam, the meat - people joke that it lasts forever.)

Summary

Here’s a chart summarizing the information above:

Timeframe	Documents
3 years	Employee records
	Trade confirmations
	Customer statements
	Public communications
4 years	Complaints (FINRA)
5 years	CTRs
	SARs
	CIP information
6 years	Blotters
	Customer account records
	Complaints (MSRB)
Lifetime	Stock certificates
	Partnership agreements
	Articles of incorporation
	Meeting minutes

Regardless of the retention periods listed above, each record must be readily available if it was created within the previous 2 years. If FINRA requests recently created documents, it expects the broker-dealer to produce them quickly.