There are numerous records that need to be kept when it comes to customers of broker-dealers, we’ve touched on them throughout this guide.
Let’s just recap on one very important one.
Trade confirmations
Whenever a trade takes place, a document, known as a trade confirmation, is processed.
This contains necessary information including:
- The confirmation of the trade
- The settlement date of the trade
- The money the customer either is owned or must be paid by them
Before a trade is completed, in other words, by the settlement date, customers must be given a confirmation of that trade in a written format (this includes electronically, should the customer agree to receive it in this manner).
A copy of the confirmation from the customer will then come to the registered representative and they must then check it against the order ticket to ensure accuracy.
All trade confirmation must be kept for a period of three years by broker-dealers.
We’ve also mentioned how records should be stored numerous times as well as the duration, so we are not going to cover them again.
If you want to check the rules that govern this section, here they are:
FINRA Rules
Customer Account Statements – Rule 2231
Customer Confirmations – Rule 2232
Educational Communication Related to Recruitment Practices and Account Transfers – Rule 2273
Books and Records Requirements – Rule 4510
Customer Account Transfer Contracts – Rule 11870
SEC Rules and Regulations
Securities Exchange Act of 1934
Confirmation of Transactions – Rule 10b-10
Records To Be Preserved by Certain Exchange Members, Brokers, and Dealers – Rule 17a-4
Financial Recordkeeping and Reporting of Currency and Foreign Transactions – Rule 17a-8
MSRB Rules
Books and Records To Be Made by Brokers, Dealers, and Municipal Securities Dealers and Municipal Advisers – Rule G-8
Preservation of Records – G-9
Confirmation, Clearance, Settlement, and Other Uniform Practice Requirements with Respect to Transactions with Customers – G-15
Customer Account Transfers – G26
