Customer Complaint Recordkeeping and Reporting

The two requirements work together: complaint-recordkeeping tells the firm what to keep, while the reporting requirement tells the firm what to report and when.

What Counts as a Written Customer Complaint

A written customer complaint is any written grievance by a customer (or a person authorized to act on the customer's behalf) concerning the member or an associated person (AP).

• Email, mail, fax, social-media direct message, and customer-portal messages all count
• Oral complaints are not "written customer complaints" for recordkeeping purposes, though the firm may have separate WSP capture obligations
• A complaint about firm operations, sales practice, account handling, fees, or rep conduct all qualify

OSJ Complaint Files

Each member must keep and preserve, in each OSJ, either:

• A separate file of all written customer complaints relating to that office (including complaints relating to activities supervised from that office) and the action taken by the firm, or
• A separate record of the complaints with a clear cross-reference to the files in that office holding the connected correspondence

Retention and Storage

Securities Exchange Act Layer

The Securities Exchange Act of 1934 (SEA) adds a parallel federal floor:

• The SEC's books-and-records framework requires a record per AP capturing every written complaint received about that person, plus a notice that customers have been given the firm's complaint-department address and phone number
• The SEC's retention requirements require those records to be preserved for not less than 3 years, with the first 2 years easily accessible
• The SEC's books-and-records framework also requires prompt furnishing of records to the SEC on request

When the SEC and FINRA retention requirements differ, the longer period controls, so the practical floor for written customer complaint records is 4 years under FINRA.

Exam Tip: Gotchas

• The FINRA floor is 4 years, not 3. Even though the SEC books-and-records floor is 3 years (with the first 2 years easily accessible), FINRA's 4-year requirement controls because the longer period wins. A firm that purges complaint files at the 3-year mark is in violation of the FINRA requirement even if it complies with the SEC floor.
• Electronic complaints count as "written" complaints. An email complaining about excessive trading is captured by the FINRA complaint-recordkeeping requirement the same as a paper letter. A WSP that defines "written complaint" narrowly to exclude email is non-compliant.

30-Day Per-Event Reporting

A member must promptly report to FINRA (no later than 30 calendar days after the firm knows or should have known of the event) when the member or an AP:

• Has been found to have violated any securities-, insurance-, commodities-, financial-, or investment-related law, rule, regulation, or standard of conduct of any domestic or foreign regulator, self-regulatory organization (SRO), or business or professional organization
• Is the subject of any written customer complaint alleging theft, misappropriation of funds or securities, or forgery
• Is named as a defendant or respondent in any proceeding brought by a domestic / foreign regulator or SRO alleging a violation of federal securities laws, FINRA / Municipal Securities Rulemaking Board (MSRB) / SEC rules, or insurance, commodities, or financial-related rules
• Is denied registration, expelled, enjoined, directed to cease and desist, suspended, barred, otherwise disciplined, or has been the subject of any other disciplinary action by any regulator
• Is indicted, convicted of, or pleads guilty or no contest to any felony or any misdemeanor that involves the purchase or sale of any security, the taking of a false oath, theft, embezzlement, false statement, bribery, forgery, counterfeiting, extortion, or a conspiracy to commit any of the above
• Is the subject of any claim for damages by a customer that is settled or adjudicated for an amount exceeding $15,000 if a registered person is involved or $25,000 if the firm is involved (single complaint, not a roll-up)
• Is associated in any business or financial activity with any person who is subject to a statutory disqualification (as defined in the Securities Exchange Act of 1934)

How the Settlement Threshold Works

The $15,000 / $25,000 thresholds apply to claims that are settled or adjudicated, not to the receipt of the underlying claim:

• The firm reports when settlement or judgment crosses the threshold, not when the claim is filed
• A complaint filed and dismissed below the threshold is not a per-event reportable settlement
• A complaint that settles for $14,000 (with a registered person involved) is not per-event reportable; one that settles for $16,000 is

What Triggers a 30-Day Theft / Forgery Report

A written customer complaint alleging theft, misappropriation of funds or securities, or forgery is itself a per-event reportable event, regardless of dollar amount or whether the firm believes the complaint has merit. The report is triggered by the receipt of the allegation, not by any internal determination that the allegation is true.

Exam Tip: Gotchas

• A complaint alleging the rep stole funds is BOTH a 30-day per-event report AND part of the quarterly statistical roll-up. A complaint about excessive trading is in the quarterly statistical report only. The theft / misappropriation / forgery allegation is the trigger, regardless of whether the firm thinks the claim is meritorious.
• The $15,000 / $25,000 thresholds apply to settlement or judgment amounts, NOT to the size of the original demand. A customer demanding $50,000 who settles for $10,000 has not crossed the per-event threshold, even though the demand exceeded it. The reporting trigger is the settled or adjudicated amount.

Internal-Conclusion Reports

A member must report to FINRA within 30 calendar days after the firm has concluded, or reasonably should have concluded, that the member or an AP has violated any securities-, insurance-, commodities-, financial-, or investment-related law, rule, regulation, or standard of conduct.

• This is the internal-investigation trigger: the firm is required to self-report violations it discovers, even when no external regulator has acted
• The 30-day clock runs from the firm's conclusion (or the time the firm should have concluded), not from the underlying conduct

Think of it this way: Per-event reports cover outward-facing events (regulators, customers, court filings). Internal-conclusion reports cover inward-facing events (the firm's own internal conclusions). Together they ensure that violations come to FINRA's attention regardless of whether they surface through a customer, a regulator, or the firm's own compliance review.

Quarterly Statistical Reports

A member must report to FINRA statistical and summary information regarding written customer complaints received during the calendar quarter.

The quarterly statistical report captures complaint volume, type, and disposition firm-wide; the per-event report captures specific high-priority events.

Exam Tip: Gotchas

• Quarterly statistical reports cover EVERY written customer complaint, but per-event reports are limited. A complaint about excessive trading appears in the quarterly statistical report only. A complaint alleging the rep forged a signature appears in BOTH the per-event 30-day report AND the quarterly roll-up.
• The 15th-of-the-month deadline is calendar-following-the-quarter. Q1 ends March 31, so the report is due by April 15. Q2 ends June 30, due by July 15. The deadline is not 30 days, not 45 days, not the last day of the month; it is the 15th day.

Copies of Filings

A member must file with FINRA copies of:

• Any criminal complaint or plea filed against the member or an AP
• Any civil action or arbitration in which the member or AP is named, involving an investment-related matter
• Any arbitration claim filed against the member in an SRO or non-SRO arbitration forum

This is the document-filing companion to the per-event reporting: the firm reports the event and submits the underlying papers.

How the Reports Tie Together

Exam Tip: Gotchas

• The reporting framework operates in parallel, not in sequence. A single event (e.g., an arbitration claim alleging theft, settled for $20,000) can trigger complaint-file retention, a per-event theft-allegation report, a per-event $20K settlement report (registered-person threshold), the quarterly statistical roll-up, AND the filing-copy duty. The firm does not pick one; it complies with all triggered requirements.