FINRA record retention requirements
Also known as: books and records requirements
FINRA record retention requirements are the rules dictating how long broker-dealers must keep their business records. Most records fall into three buckets: lifetime retention for organizational documents, six years for core account and financial records, and three years for most everything else.
Broker-dealers generate enormous amounts of paperwork — account forms, order tickets, trade blotters, communications, financial statements — and securities regulations require firms to keep it all for specified periods. These books and records requirements stem from SEC rules and FINRA's own rulebook, which obligates member firms to preserve records in the format and for the timeframes the SEC prescribes.
The retention periods sort into three main buckets. Lifetime records must be kept for the life of the firm, and include foundational documents like articles of incorporation, partnership agreements, meeting minutes, and stock certificate books. Six-year records include the firm's core operational documents: trade blotters, the general ledger, customer account records, and securities position records. Three-year records cover most other documents, including trade confirmations, order tickets, communications with the public, advertising, and employment records like Forms U4 and U5.
Two additional details show up on exams. First, records must generally be kept in an easily accessible place for the first two years of their retention period. Second, firms may store records electronically, but the system must protect records from undetected alteration. SEC Rule 17a-4 permits two approaches: the traditional WORM format (write once, read many — non-rewriteable and non-erasable), or an audit-trail system that can recreate an original record after it has been modified or deleted.
Record retention is tested on the SIE exam within its rules and regulations material. Focus on matching common record types to the correct bucket — lifetime, six years, or three years — and remember the two-year accessibility requirement.
Key takeaways
- Broker-dealer records fall into three retention buckets: lifetime, six years, and three years.
- Lifetime records include organizational documents like articles of incorporation and meeting minutes.
- Six-year records include blotters, the general ledger, and customer account records.
- Most other records — confirmations, order tickets, communications, advertising — are kept for three years.
- Records must be easily accessible for their first two years, and electronic storage must use either WORM format or an audit-trail system that can recreate an altered or deleted record.