What records must be preserved by a broker-dealer after registration, and for how long?

• A. Only physical books for 1 year
• B. Books, blotters, correspondence, memoranda, emails, etc., for 3 years with first 2 years easily accessible
• C. Digital records only for 5 years
• D. No specific retention period

Answer: (B)

Record-keeping duration for broker-dealers is governed by SEC Rule 17a-4, which requires maintaining certain books and records for three years, with the first two years in an easily accessible location. This includes books, blotters, correspondence, memoranda, emails, and similar documents. Keeping these records for three years ensures regulators can review a firm’s activities during examinations and investigations, and supports proper supervision and customer protection. The requirement that the first two years be easily accessible is important for quick retrieval during inquiries. The other options don’t fit because they either shorten the period, limit the records to only digital or only physical, or claim there’s no specified retention period, none of which aligns with the rule.