SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 14: Answer and Explanation

Question: 14

Which of the following is true of the books and records requirements for member broker-dealers?

• A. Requirements must allow for self-regulatory organizations to carry out examinations of broker-dealers.
• B. Data must be kept on electronic media.
• C. Records must be kept ten years, unless specifically designated for a different time frame.
• D. A registered principal must regularly sign an inventory of records.

Correct Answer: A

Explanation:

A: Choice A is a books and records requirement for member broker-dealers. Choice B is not a requirement. Some data must be readily accessible, and the rest must be eventually accessible. Choice C is not a requirement. Records must generally be kept six years, unless specifically designated for a different time frame. Choice D is not a requirement, though a registered principal may be required to oversee the process of record retention.