Securities Transactions - Record Keeping
A broker-dealer must keep the following records for six years:
- All receipts and disbursements of cash and all other debits and credits
- Ledgers reflecting all assets, liabilities, capital, income and expenses
- All purchases, sales, receipts and deliveries of securities and commodities for each account, and all other debits and credits to each account
- A securities record or ledger reflecting positions carried on the broker-dealer's own account as well as those on its clients' accounts
Additionally, the broker-dealer must keep these records for three years:
- All guarantees of accounts and all powers of attorney and other evidence of the granting of any discretionary authority, and copies of resolutions empowering an agent to act on behalf of a corporation
- All repurchase and reverse repurchase agreements, and copies of all other debits and credits for securities, cash and other items for the broker-dealer's own account as well as for its clients' accounts
The NYSE requires its members to keep still more records for three years:
- Every order transmitted from the member to the exchange floor
- Every order received by the member either orally or in writing
- Every order entered by the member into the Off-Hours Trading Facility
- The time of the entry of every order cancellation
A broker-dealer has to maintain in perpetuity a file of customer complaints and their disposition.
Keeping Customer Accounts Up to Date
The broker-dealer must also transmit all pertinent account information to its customers. This means the broker-dealer needs to send out statements of account showing security and money positions and entries at least quarterly to all accounts having any kind of activity during the preceding quarter.
Also, the broker-dealer must send transaction confirmations to its customers, indicating settlement dates and the exchange on which the securities traded. Government securities are cleared through the FICC via Fedwire. Munis can be cleared in much the same way as equities, but can also be cleared with delayed delivery or other mutually agreeable terms. DKs go to arbitration.
ProfessionalsTake a look at five primary reasons why financial advisors still choose to recommend mutual funds over other types of investment vehicles.
BrokersIndependent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
Personal FinanceRIAs and brokers are held to different standards when providing investment advice. Here's how they differ.
Trading Systems & SoftwareLaunching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
ProfessionalsLearn how to answer option questions on the Series 7 exam. Pass your Series 7 exam with the help of these tips.
ProfessionalsFINRA Series 55 Exam Guide
ProfessionalsFINRA Series 62 Exam Guide
ProfessionalsFINRA/NASAA Series 99 Exam Guide
ProfessionalsFINRA/NASAA Series 65 Exam Guide
ProfessionalsFINRA/NASAA Series 66 Exam Guide
- No results found.
The exact nature of a financial advisor's job responsibilities determines whether he must have a Series 7 license. If a financial ... Read Full Answer >>
Financial advisors must possess various securities licenses in order to sell investment products. The specific products an ... Read Full Answer >>
The Financial Industry Regulatory Authority (FINRA) offers a variety of licenses that must be obtained before conducting ... Read Full Answer >>