General Securities Sales Supervisor (Series10) Practice Exam

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Study for the General Securities Sales Supervisor (Series 10) Exam. Enhance your skills with multiple choice questions and explanations. Master your exam with detailed insights and tips!

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According to SEC rules, how long must Broker-Dealer "A" retain account records after a transfer to Broker-Dealer "B"?

1 year
3 years
6 years
12 years

The correct answer is: 6 years

Broker-dealers are required to retain account records for a minimum of six years after a transfer. This retention period is specified by SEC Rule 17a-4, which mandates that certain records must be maintained for specified durations. The rationale behind this rule is to ensure that there is a comprehensive and accessible history of customer accounts, which can be crucial for regulatory review, investigations, and maintaining customer rights in the event of disputes. The choice of six years as the minimum retention period reflects a balance between the need for accessibility and the practical implications of storage and record management. Thus, when records are transferred to another broker-dealer, the originating broker-dealer must maintain those records for an additional six years to comply with SEC regulations. This ensures that both broker-dealers have access to necessary information regarding transactions and account history for compliance purposes.