Quick Answer
A firm makes blotters, general ledgers, customer ledger accounts, order memoranda, and trial balances, then preserves each for its own period and trigger. Regulation FD is different: it binds the issuer to disclose material nonpublic information publicly, simultaneously when the selective disclosure was intentional.
Every retention answer is two facts: the period, and what starts it.
Which One-Liners Win Points?
- Order memoranda record each brokerage order whether or not executed, and a discretionary order must be designated as such.
- Any Financial Industry Regulatory Authority (FINRA) record with no stated period defaults to six years.
- Electronic preservation has two routes: a non-rewriteable, non-erasable (WORM) format, or a time-stamped audit trail that can recreate an original record. Only WORM needs a separate audit system.
- An undertaking stays on file with the designated examining authority, signed by either a designated executive officer or a designated third party.
- Ceasing business never shortens a running retention clock. Where the preservation rule and the Bank Secrecy Act overlap, the longer period wins.
- The educational communication reaches a registered person's former customers for three months from that person's start date, with written contact or within 3 business days of oral contact.
- Regulation FD (Regulation Fair Disclosure) binds the issuer, not the broker-dealer, when it gives material nonpublic information to a broker-dealer, investment adviser, investment company, or securityholder likely to trade.
- Intentional disclosure needs simultaneous public disclosure; non-intentional needs prompt disclosure, no later than the later of 24 hours or the next day's trading on the New York Stock Exchange.
Which Numbers Matter Most?
| Record | Period and trigger |
|---|---|
| Blotters, general ledgers, customer ledger accounts | 6 years from creation, first 2 years accessible |
| Order memoranda, most transaction records | 3 years from creation, first 2 years accessible |
| Account cards | 6 years from account closing |
| Customer account information | 6 years from the update, accessible throughout |
| Articles, minute books, licenses | life of the enterprise or a successor |
| Compliance and supervisory manuals | 3 years after the firm stops using them |
| Regulatory examination reports | 3 years from the report date |
| Written customer complaint records | 4 years |
Which Gotchas Trip Students Up?
Exam Tip: Gotchas
- Making a record and preserving it are two duties. A question about how long or how accessible tests preservation, even when it names a blotter.
- "First two years easily accessible" belongs to the first two rows alone. Manuals and examination reports stay accessible throughout, and life-of-the-enterprise records carry no accessibility requirement.
- The two six-year account rules start on different dates: account cards from account closing, customer account information at every update.
- The prompt clock starts when a senior official knows, or is reckless in not knowing, that the information was material and nonpublic.
- A Regulation FD miss is not by itself an antifraud violation, and the registered-offering exclusion cannot help a Regulation D issuer.
One-Breath Recap
A firm creates blotters, general ledgers, customer ledger accounts, order memoranda whether executed or not, and monthly trial balances, then preserves each for its own period from its own trigger: six years for the ledgers, three for order memoranda, six from account closing for account cards, life of the enterprise for organizational records. Regulation FD then binds the issuer, not the representative, to disclose material nonpublic information publicly, simultaneously when the disclosure was intentional and promptly when it was not, unless the recipient owed or accepted a duty of confidence.
Need more than the recap? Read the full Books, Records and Regulation FD unit.