Recordkeeping Rules - Confirmation of Transactions and Account Statements


Confirmation of Transactions


SEC Rule 10b-10
This rule requires broker-dealers to provide the following information to customers before or at the completion of a securities transaction. The following must be disclosed in a written notification:

  • The date and time of the transaction (or the fact that the time of the transaction will be furnished upon written request to such customer) and the identity, price, and number of shares or units (or principal amount) of such security purchased or sold by such customer

  • Whether the broker or dealer is acting as agent for such customer, as agent for some other person, as agent for both such customer and some other person, or as principal for its own account; and if the broker or dealer is acting as principal and whether it is a market maker in the security

  • The amount of any remuneration received or to be received by the broker from such customer in connection with the transaction

The broker-dealer shall give or send information requested pursuant to this rule within five business days of receipt of the request. However, in the case of information pertaining to a transaction effected more than 30 days prior to receipt of the request, the information shall be given or sent to the customer within 15 business days.

NASD (now known as FINRA) Rule 2230: Confirmations
This rule requires a broker-dealer at or before the completion of each transaction with a customer, to give or send to such customer written notification disclosing:

  1. whether such member is acting as a broker for such customer, as a dealer for his or her own account, as a broker for some other person, or as a broker for both such customer and some other person; and

  2. in any case in which such member is acting as a broker for such customer or for both such customer and some other person, either the name of the person from whom the security was purchased or to whom it was sold for such customer and the date and time when such transaction took place or the fact that such information will be furnished upon the request of such customer, and the source and amount of any commission or other remuneration received or to be received by such member in connection with the transaction.

Account Statements

NASD (now known as FINRA) Rule 2340: Customer Account Statements
This rulerequires broker-dealers to provide customers with a statement at least quarterly, although if any activity has occurred in the account, the usual practice is to provide a statement for the month in which the activity has occurred. The account statement contains the following information:

  • Cash balances
  • All security positions
  • Activity in the account since the last statement
Registration and Regulation of Brokers and Dealers


Related Articles
  1. Economics

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  2. Fundamental Analysis

    The Importance Of Analyzing Accounts Receivable

    While investors often focus on revenues, net income, and earnings per share, they should not overlook the importance of analyzing accounts receivable.
  3. Your Practice

    How Brokers Are Compensated for Selling Bonds

    Find out how brokers are paid for selling bonds and how the transaction costs are passed on to the investor through a markup or commission.
  4. Economics

    How Big Data Has Changed Marketing

    Big data has enabled marketers to enhance their customer engagement and customer retention strategies by providing insight into behavior and thoughts.
  5. Investing Basics

    NYIF Instructor Series: SEC Customer Protection Rule

    In this short instructional video Jack Farmer explains what SEC Rule 15c3-3 is and how it applies to you as an investor.
  6. Investing Basics

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  7. Professionals

    What Financial Advisors and Brokers Need to Know About Rule 407

    Learn about NYSE Rule 407 and how it may impact you as a financial advisor or investment broker. What you don't know about this regulation can hurt you.
  8. Professionals

    Is The Series 24 Exam Hard?

    What makes the series 24 so challenging? The exam focuses very heavily on the supervision of trading and market making and the supervision of investment banking.
  9. Economics

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  10. Forex Education

    Price Shading In The Forex Markets

    This practice puts brokers ahead of their clients, but it doesn't have to be a negative for traders.
RELATED TERMS
  1. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  2. Authorization Only

    A type of sale transaction that creates a pending transaction ...
  3. Dealer

    A person or firm in the business of buying and selling securities ...
  4. Void Transaction

    A credit card purchase that a seller cancels after it has been ...
  5. Debit Balance

    In a margin account, money owed by the customer to the broker ...
  6. Accounting Event

    A transaction or change recognized on the financial statements ...
RELATED FAQS
  1. What are the SEC (Securities And Exchange Commission) rules about OTC (over-the-counter) ...

    Find out how the Securities and Exchange Commission and the Financial Industry Regulatory Authority regulate trades on the ... Read Answer >>
  2. How is buying on margin regulated by the Securities and Exchange Commission (SEC)?

    Learn how FINRA and the Federal Reserve regulate margin account trading, and understand how pattern day trading can impact ... Read Answer >>
  3. Which financial accounting statement contains information on a company's net sales?

    Find out which accounting statement contains information on a company's net sales as well as other key statements analysts ... Read Answer >>
  4. How should investors interpret accounts receivable information on a company's balance ...

    Analyze accounts receivable information on a company's balance sheet carefully. Receivables offer confidence of future cash ... Read Answer >>
  5. How long are accounts receivable allowed to be outstanding?

    Learn about accounts receivable, including how long they typically remain outstanding, and how their payment or lack of payment ... Read Answer >>
  6. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center