Introduction

Welcome to Account Communications and Records: the rules governing how broker-dealers communicate with customers and maintain their books and records.

Exam Weight: Part of F3 73% (~91 questions)

What You'll Learn

In this unit, you'll cover:

• Customer Confirmations: What must appear on trade confirmations under SEC Rule 10b-10
• Account Statements: Quarterly, monthly, and penny stock statement requirements
• Account Value: Realized vs. unrealized gains/losses and cost basis reporting
• Withdrawals and Tenders: Rules for cash withdrawals and tender offer procedures
• Customer Account Records: Maintaining and updating customer information under FINRA Rule 4512
• Account Transfers: The ACATS system and transfer timelines under FINRA Rule 11870
• Books and Records Retention: The 3-year vs. 6-year retention framework under SEC Rule 17a-4
• Account Closure: Voluntary closures, firm-initiated closures, and escheatment
• Regulatory Reporting: Regulation FD, MSRB rules, and Cboe reporting requirements

Why This Matters

Every trade generates paperwork, every account needs statements, and every record has a retention period. These are the operational nuts and bolts of the securities industry. The Series 7 tests specific timelines, required disclosures, and retention periods heavily, particularly the ACATS transfer process, the agent-vs.-principal confirmation distinction, and the 3-year vs. 6-year records framework. Getting these details right is essential for passing.

Let's start with customer confirmations: the document customers receive after every transaction.