SIE Ready🛡️ Compliance Considerations · Lesson 3 of 6 · 5 min
Six, Three, and Forever
🗄️ If it isn't written down, to a regulator it didn't happen. The SEC tells firms both what to record and how long to keep it.
💡 Key idea
Ledgers and blotters: 6 years. Tickets, confirms and communications: 3 years. Charter and minute books: life of the firm. First 2 years easily accessible.
🧠 Why it matters
SEC Rule 17a-3 lists the records a broker-dealer must MAKE; Rule 17a-4 says how long to KEEP them. Think 6, 3 and forever. SIX YEARS: blotters (the daily trade diary), the general ledger and customer account ledgers; customer account records are kept 6 years after the account closes. THREE YEARS: order tickets, trade confirmations, business communications (including advertising), bank statements and trial balances. LIFE OF THE FIRM: articles of incorporation or partnership, minute books, stock certificate books and Form BD. For 6- and 3-year records, the first 2 years must be easily accessible. Electronic records must be non-rewriteable or keep a full audit trail. Example: a 2022 order ticket may be destroyed in 2026; a 2022 blotter page may not.
📈 In the real world
📦 A branch manager wants to shred boxes from 2021 to free up space. Compliance sorts them first: the order tickets and copies of old sales letters can go, since they are past 3 years. The blotter pages and customer ledgers stay until 6 years have run, and the corporate minute book never leaves.
📌 Takeaways
- 17a-3 = what to make; 17a-4 = how long to keep
- 6 years for blotters and ledgers, 3 years for tickets, confirms and communications
- Corporate documents and Form BD: life of the enterprise; first 2 years always easily accessible
📖 Terms in this lesson
Rules 17a-3 and 17a-4: SEC rules on which records firms must make and how long to keep them, for example three years, six years or the firm's lifetime.
✅ Test yourself
Under Rule 17a-4, how long must a broker-dealer keep its blotters?
- Three years
- Six years
- Two years
- Life of the firm
Answer: B · Six years
Blotters, the general ledger and customer ledgers are 6-year records. Three years covers items like order tickets and confirmations, and life-of-firm covers documents such as articles of incorporation.
Which record must a broker-dealer keep for the life of the enterprise?
- Its trade confirmations
- Its minute books
- Its bank statements
- Its order tickets
Answer: B · Its minute books
Minute books, articles of incorporation or partnership, stock certificate books and Form BD are kept for the life of the firm. Order tickets, confirmations and bank statements are 3-year records.
For records kept for three years, what extra condition applies?
- They must be kept on paper
- A principal must sign each page
- They must be filed with FINRA yearly
- First 2 years easily accessible
Answer: D · First 2 years easily accessible
Rule 17a-4 requires the first two years of each retention period to be in an easily accessible place. Electronic storage is allowed, and the rule does not require principal signatures on each page or annual filing.
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