Quick Answer
A firm that stops transacting a securities business, or deregisters as a broker-dealer, must keep preserving whatever records it already had to preserve, for the remainder of the original retention period. Closing the business does not shorten or reset the retention clock on any record already in the firm's possession.
A firm's recordkeeping duty does not end when the firm does. Records already on a retention clock stay on it until that clock runs out.
What Happens to Records When a Firm Stops Doing Business?
- A firm that stops transacting a securities business, or deregisters as a broker-dealer, must keep preserving whatever records it already had to preserve for the remainder of the original retention period.
- Closing the business does not shorten or reset the retention clock on any record already in the firm's possession.
What Should You Check on Exam Day?
- Confirm that ceasing business never shortens or resets a retention clock already running on an existing record.
- Check that deregistering as a broker-dealer carries the same continuing duty as halting transactions, with the original period running to its end.