The final piece of the disclosure framework is recordkeeping. The Series 63 angle is narrow: it tests how much authority a state has over a broker-dealer's books and records, not the detailed federal retention schedule.
Records to Be Made
- Broker-dealers must make and keep the records required by the federal recordkeeping rules
- A state's recordkeeping standards must be consistent with those federal standards; a state cannot impose recordkeeping requirements that exceed the federal ones
State Authority Limitations
- The North American Securities Administrators Association (NASAA) has not issued a model rule on broker-dealer books and records
- Federal law limits state regulatory authority over broker-dealer recordkeeping
- A state may require records consistent with the federal standards, but it cannot impose recordkeeping requirements that exceed them
- The state Administrator may examine a broker-dealer's books and records, and may also prescribe records by rule or order. For broker-dealers, though, that power is capped by federal law: the state may require records consistent with the federal standards and may not require records that differ from or go beyond them
Exam Tip: Gotchas
The key point for state law is the limit on a state's authority: federal law limits the Administrator's recordkeeping power over broker-dealers, it does not eliminate it. A state cannot require a broker-dealer to make or keep records beyond what the federal recordkeeping standards already require, so the practical Series 63 answer is that the federal rules set the content of a broker-dealer's records.