Welcome to Customer Communications and Records: the paper trail that proves every Series 6 recommendation actually happened the way it was supposed to. Unit 9 covered what the rep must tell the customer at the point of sale. This unit covers what the firm must send the customer after the sale, what records the firm must keep internally, and how accounts move between firms when a customer leaves.
Exam Weight: Part of 50% (25 questions across Chapter 3)
What You'll Learn
In this unit, you'll cover:
- Customer Confirmations: Trade confirmations under SEC, FINRA, and MSRB confirmation rules, including capacity disclosure, remuneration, and third-party mailing rules
- Customer Account Statements: Quarterly delivery under the FINRA account-statement rule, realized vs. unrealized gains, the delivery-versus-payment / receipt-versus-payment (DVP/RVP) exception, and third-party duplicate-delivery requirements
- Customer Account Records and Required Notifications: The customer account information rule, change-of-address procedures, Trusted Contact Person (TCP) updates, and investment objective changes
- Books and Records Retention Requirements: the SEC's broker-dealer books-and-records and recordkeeping rules, the 6-years / 3-years framework, customer account records preserved for 6 years after account closing, the MSRB municipal-records creation and preservation rules, and the SEC's broker-dealer Bank Secrecy Act (BSA) compliance cross-references
- Customer Account Transfers (ACATS): The FINRA customer account transfer rule and the MSRB municipal-account transfer rule, the 1-business-day validate plus 3-business-day complete timeline, and variable annuity transfer mechanics
- Educational Communication on Recruiting: The FINRA-prepared educational communication delivered to former customers of a recruited rep for 3 months after the rep joins
- Account Closure Procedures: Customer-initiated closure, inactive-account closure, dormant and escheated accounts, and post-closure retention obligations
Why This Matters
Function 3.4 is the recordkeeping spine of Series 6. Every trade the rep executes creates a chain of documents:
- Confirmation to the customer
- Statement showing the position
- Internal record of the transaction
- Retention of that record for a regulatory period
A rep who does not understand which document must reach the customer by when, and which records the firm must preserve for 6 years vs. 3 years, cannot spot the three most common customer-complaint scenarios:
- A missing confirmation disclosing capacity
- A late or missing account statement
- A transfer request that the carrying firm has not acted on within the ACATS window
The Series 6 exam tests whether you can:
- Name the confirmation and statement delivery triggers: at or before completion of the transaction (under the trade-confirmation rule and the FINRA confirmation rule); at least quarterly (under the FINRA account-statement rule)
- Distinguish agent from principal capacity: commission vs. markup / markdown; net transactions require express "net" labeling
- Apply the 6-year / 3-year retention framework: core records and customer account records = 6 years; order tickets, confirmations, and communications = 3 years; first 2 years easily accessible in both tiers
- Recognize the 6-years-after-closing rule: customer account records do not start their retention clock at account opening
- Walk the ACATS timeline: 1 business day to validate, 3 business days to complete, 6-month residual-position handling
- Identify the educational-communication trigger: a rep's former customer is contacted about transferring assets during the 3-month window after the rep's new-firm hire
The sections below walk the records lifecycle in order: first the documents that travel to the customer (confirmation, statement, account-record notifications), then the records the firm preserves internally (the 17a-3 / 17a-4 framework), then the scenarios that move accounts between firms (ACATS transfer, recruiting, closure).
Let's start with the document that lands on the customer's desk first: the trade confirmation.