UNIT 28 QBANK Flashcards
Which of the following records must be maintained for six years?
A) Minute books of directors meetings
B) Organizational amendments shown on Form BD
C) Customer ledgers (statements)
D) Customer confirmations and order tickets
C) Customer ledgers (statements)
Explanation
Customer ledgers, from which account statements are prepared, must be kept on file or in appropriate electronic form for six years. Minute books and Form BD and its amendments are kept for the life of the firm. Confirmations and order tickets are kept for three years.
Which of the following records must be kept by a broker-dealer firm for six years?
I. Customer new account forms
II. Advertising the firm has published
III. Stock records
IV. Minute books
A) I and IV
B) I and III
C) II and IV
D) II and III
B) I and III
I. Customer new account forms
III. Stock records
Explanation
New account forms filled out when the customer account was opened and stock records showing all the securities held by the firm and where they are held must be kept for six years. Minute books showing the minutes of directors’ meetings are lifetime records. Advertising need only be kept for three years.
Written customer complaints must be kept for how many years?
A) Six years by the SEC
B) Two years by the member firms
C) Five years by the SEC
D) Four years by the broker-dealer
D) Four years by the broker-dealer
Explanation
Customer complaints is the only record that must be kept for four years.
Records of advertising, customer confirmations, customer order tickets, and U-5 forms need to be retained for how many years?
A) Four years
B) Three years
C) Six years
D) Five years
B) Three years
Explanation
These are all three-year records.
The following records must be maintained by a broker-dealer: partnership records, articles of incorporation, records of the board of directors, Form BD, and amendments to the form. How long must they be maintained by the firm?
A) Four years from the creation of the record
B) As long as the firm is in business
C) Two years form the creation of the record
D) Six years from the creation of the record
B) As long as the firm is in business
Explanation
These records are considered to define the firm and must be kept as long as the firm is in business.
Which of the following must be kept for the life of the firm?
A) Written customer complaints
B) General ledger
C) Stock certificate book
D) Customer account records
C) Stock certificate book
Explanation
The stock certificate book, also known as the stock book or stock ledger, is a permanent record of a corporation’s capital stock and is to be held for the life of the corporation. The general ledger and customer account records are kept for six years; written customer complaints are kept for four years.
Records of original entry must be recorded no later than the next business day and must be kept readily available for
A) four years.
B) three years.
C) two years.
D) six years.
C) two years.
Explanation
The records must be maintained for a period of six years, but must be readily available for two years.
Correspondence must be maintained by a member firm for
A) five years.
B) three years.
C) the life of the firm.
D) six years.
B) three years.
Explanation
Correspondence, along with all other communications with the public, must be maintained for three years since last use.
Which of the following are not three-year or six-year records?
I. Compliance and Procedures Manual
II. List of home, regional, and branch offices
III. Minutes of directors’ meetings
IV. Customer complaints
A) III and IV
B) I and II
C) II and III
D) I and IV
A) III and IV
III. Minutes of directors’ meetings
IV. Customer complaints
Explanation
Minutes of directors’ meetings (The Minute Book) is a lifetime record. Customer complaints must be kept on file for four years, not three or six. The Compliance and Procedures Manual, which must frequently be updated, and the list of all offices where business is done are both three-year records.
Which of the following records must be kept by a broker-dealer firm for three years?
A) Form BD and amendments
B) Customer account records
C) Trial balances
D) Blotters
C) Trial balances
Explanation
Trial balances, usually run at the end of a reporting period to ensure that the firm’s credit and debit columns arrive at identical sums, must be kept for three years after the trial balance was run. Form BD and amendments are lifetime records, whereas blotters and customer account records are six-year records.
The securities industry is highly regulated, and as such, it is important for broker-dealers to keep detailed records. If a customer complaint has been received regarding the actions of a registered representative, it will be maintained at the office of supervisory jurisdiction for a period of
A) ten years.
B) the term of employment for the registered representative at the broker-dealer.
C) four years.
D) one year.
C) four years.
Explanation
Copies of all customer complaints must be maintained in a file at the office of supervisory jurisdiction for a period of four years.
Which of the following records must be kept for the life of a broker-dealer firm?
A) Customer ledgers
B) The general ledger
C) Stock certificate books
D) Forms U-4 and U-5
C) Stock certificate books
Explanation
Certificate books on the stock issued by the firm must be kept as long as the firm is active. The general ledger and customer ledgers need only be kept for six years, and forms U-4 and U-5 regarding the firm’s associated persons need only be kept for three years.
Correspondence must be maintained by a member firm for
A) three years.
B) the life of the firm.
C) five years.
D) six years.
A) three years.
Explanation
Correspondence, along with all other communications with the public, must be maintained for three years since last use.
Records of advertising, customer confirmations, customer order tickets, and U-5 forms need to be retained for how many years?
A) Three years
B) Six years
C) Five years
D) Four years
A) Three years
Explanation
These are all three-year records.
Which of the following records must be kept for six years?
I. Customer statements
II. Customer new account forms
III. Customer confirmations
IV. Customer order tickets
A) III and IV
B) II and III
C) I and II
D) I and IV
C) I and II
I. Customer statements
II. Customer new account forms
Explanation
The buy and sell and quantity information on the order tickets and confirmations statements will show up on the customer’s monthly or quarterly statements. Monthly and quarterly statements must be kept six years.
