Trading, Accounts & Prohibited ActsQuestion 271 of 398
Broker-dealers are required to keep certain business records for specified minimum periods. What is the main regulatory reason for these recordkeeping rules?
a.To allow regulators to reconstruct activity and supervise for compliance and investor protection
b.To help firms reduce their tax bills
c.To let customers avoid paying commissions
d.To replace the need for customer confirmations
Explanation
SEC rules (such as Rules 17a-3 and 17a-4) require firms to create and preserve books and records for set periods so regulators can examine and reconstruct the firm's activities. This supports supervision, audits, and investor protection.
Law Reference: Securities Exchange Act of 1934Practice all 398 questions free — no signup required.
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