By adopting these rules, the Commission enables the State regulators to adopt and enforce similar rules on a State level, to support their examination responsibilities, and investigatory and enforcement requirements.
The Commission, recognizing the vital role that State regulators play in providing for customer protection, issued the Proposing Release, in part, to enhance the ability of the State Securities Regulators to conduct effective and efficient sales practice examinations of activities within their respective States, including those involving smaller broker-dealer offices. 6 NSMIA also provides that the Commission must consult periodically with the States concerning the adequacy of the Commission's Books and Records Rules, 7 particularly relating to the need by State Securities Regulators to have records readily accessible for their examinations. Prior to NSMIA many States had laws or rules that required broker-dealers to make and keep certain books and records that allowed the State Securities Regulators to conduct examinations and investigations to review for, among other things, sales practice violations. 5 NSMIA prohibits States from establishing books and records rules that differ from, or are in addition to, the Commission's rules. 4 On October 11, 1996, the National Securities Market Improvement Act of 1996 ("NSMIA") was enacted. The Commission originally proposed amending the Books and Records Rules in 1996 in response to concerns raised by members of the North American Securities Administrator's Association ("NASAA") regarding the adequacy of those Rules. The Commission has required that broker-dealers create and maintain certain records so that, among other things, the Commission, self-regulatory organizations ("SROs"), and State Securities Regulators 3 (collectively "securities regulatory authorities") may conduct effective examinations of broker-dealers. The Securities and Exchange Commission's (the "Commission") books and records rules, Rule 17a-3 1 and Rule 17a-4 2 under the Securities Exchange Act of 1934 ("Exchange Act")(hereinafter the "Books and Records Rules"), specify minimum requirements with respect to the records that broker-dealers must make, and how long those records and other documents relating to a broker-dealer's business must be kept. Gauch, Attorney, at (202) 942-0765 Office of Risk Management and Control, Division of Market Regulation, United States Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. McGowan, Assistant Director, at (202) 942-4886 or Bonnie L. Macchiaroli, Associate Director, at (202) 942-0131 Thomas K. The effective date is May 2, 2003.įor Further Information Contact: Michael A. These amendments are specifically designed to assist securities regulators when conducting sales practice examinations of broker-dealers, particularly examinations of local offices.Įffective Date: The release will publish on November 2, 2001. In addition, the amendments expand the types of records that broker-dealers must maintain and require broker-dealers to maintain or promptly produce certain records at each office to which those records relate. The amendments clarify and expand recordkeeping requirements with respect to purchase and sale documents, customer records, associated person records, customer complaints, and certain other matters. Summary: The Securities and Exchange Commission today is adopting amendments to its broker-dealer books and records rules. RIN 3235-AH04 Books and Records Requirements for Brokers and Dealers Under the Securities Exchange Act of 1934Īgency: Securities and Exchange Commission.Īction: Final rule Request for Comments on Paperwork Reduction Act Burden Estimate. Securities and Exchange Commission 17 CFR PARTs 240 and 242 Final Rule: Books and Records Requirements for Brokers and Dealers Under the Securities Exchange Act of 1934
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