Domain 4

Through a series of readings and course materials, the recordkeeping curriculum will guide compliance professionals to learn how to monitor the creation and retention of required records, review required records, document compliance reviews, document exception report review and resolution, and maintain records of audits and other inspections. This process will focus on federal securities laws and regulations, enforcement actions; interpretive guidance, rules and standards set by self-regulatory agencies, industry best practices. Additional focus will include how electronic documents are treated for recordkeeping purposes.

The first component of this process involves learning the recordkeeping requirements and identifying which recordkeeping requirements are applicable to the firm’s business. Next, professionals will seek to understand who is responsible for and how the firm should monitor operations to ensure the accurate creation and retention of required records. Professionals also will learn best practices on how to review required records, including electronic records. Depending on the regulation’s applicability to the firm’s business model, professionals will learn how to document advertising and marketing reviews, as well as document exception report review and resolution of such matters. Finally, the curriculum also will focus on how to maintain records of branch audits or other types of audits and inspections.

1.	Rules 17a-3, 17a-4, 17a-5, 17a-11, 17f-1 of the Securities Exchange Act of 1934
2.	Rule 204-2 of the Investment Advisers Act of 1940
3.	NASD Conduct Rules 2210, 2211, 2212, 3110
4.	Bank Secrecy Act, Anti-Money Laundering Rules
5.	NASD Broker/Dealer Books and Records: New and Amended Recordkeeping Requirements Checklist (2003)
6.	Chapter IV, “Formulating a Records Management Program in the Electronic Age”, Investment Company Institute, Electronic Recordkeeping and Communications, Guidance for Investment Companies and Investment Advisers (2006)
7.	"Ready or Not, Here Come the New Recordkeeping Rules” NSCP Currents (July/August 2002)
8.	NASD Frequently Asked Questions About the Amendments to Broker/Dealer Books and Records Rules under the Securities Exchange Act of 1934 (Release No. 34-47910 (May 29, 2003)
9.	SEC Interpretive Release: Books and Records Requirements for Brokers and Dealers under the Securities Exchange Act of 1934, Release No. 34-47910 (May 29, 2003)
10.	“E-Mail and Instant Messaging Retention Requirements for Investment Adviser” by Michael G. Burton, Sr., Jeffrey O. Himstreet, and Jack Woodruff, NSCP National Membership Meeting (Oct. 18, 2004)
11.	"Contemporary Compliance: Part IV, Advertising – A Response” by John H. Walsh, NSCP Currents (September/October 2004)
12.	Excerpts from Chapter 7, “Practical Consideration for Performance Advertising by Advisers” by Mike Caccese and Christina Lim, Investment Adviser Regulation, A Step-by-Step Guide to Compliance and the Law, Second Edition, Nov. 2006 (Practicing Law Institute)
13.	Pages 10-11, “Assessing the Adequacy and Effectiveness of a Fund’s Compliance Policies and Procedures”, Investment Company Institute (December 2005)
14.	“Rebuilding Ethics and Compliance in the Securities Industry,” Remarks before the NYSE Regulation First Annual Securities Conference, by Mary Ann Gadziala, Associate Director, Office of Compliance Inspections and Examinations (June 23, 2005)
15.	“New Oversight Obligations ” by David Rosedahl, NSCP Currents (September/October 2004)
16.	NASD Rule 3010

The professional should be able to demonstrate a thorough understanding of the recordkeeping requirements; determine which recordkeeping requirements apply to his/her firm; understand who is responsible for creating and retaining required documents; how to monitor and review required documents; how to treat electronic documents under the recordkeeping rules and regulations, how to document report review and resolutions and what are the best practices for maintaining records of branch audits and other audits or inspections. The area of recordkeeping is governed by many different rules and is very detailed. In all cases except for anti-money laundering, broker-dealers and investment advisers are governed by different rules. Candidates are not required to memorize every recordkeeping rule and to whom they apply and under what circumstances. The successful candidate will, however, understand the nature of these rules and become familiar enough with their scope and jurisdiction so that the candidate knows where to look for future reference.

The rules establish a framework of recordkeeping requirements for SEC registered broker-dealers and investment advisers. The checklist provides a listing of specific broker-dealer recordkeeping requirements. The candidate should be able to:

The Guidance discusses the issues to consider in adopting and implementing a records management system. It also provided guidance on monitoring and reviewing electronic communications. The candidate should be able to:

Describe the process for setting up and implementing a recordkeeping system by being able to:

Discuss the benefits and costs of maintaining an appropriate records management system by being able to evaluate:

The article and interpretive release provide guidance on specific broker-dealer recordkeeping requirements. The candidate should be able to:

The outline discusses retention requirements of emails and instant messaging by broker-dealers and investment advisers. The candidate should be able to:

The article provides an overview of SEC standards for investment adviser advertising and marketing materials. The excerpt summarizes the recordkeeping requirements applicable to advertising and marketing materials. The candidate should be able to:

The readings discuss the requirements and purposes of broker-dealer and investment adviser exception reporting. They also discuss reporting up exceptions. The candidate should be able to:

The readings discuss the standards for conducting inspections of branch offices, required written reports and inspection plans. The candidate should be able to:

Domain 4: Recordkeeping