Trade Report Recordkeeping
Chapters in this video
- 0:00 Account-name changes and the Riley scenario
- 1:37 Written approval, documented reason, and the exam trap
- 2:52 Record creation versus record retention: two SEC rules
- 4:26 Six-year blotter retention and records of original entry
- 4:58 Three correction types: cancel, correct, as-of
- 5:37 Why corrections are second records, not overwrites
- 6:34 FINRA audit day: blotters as the investigative spine
- 7:10 Pattern detection versus perfect paperwork
- 7:46 Rapid-fire exam recap
What this video covers
- Why an account-name or designation change requires written approval from a qualified registered principal, plus a documented reason, and why oral or email approval fails on exam day
- How the account-name-change recordkeeping requirement applies equally to customer trading accounts, firm error accounts, and firm proprietary accounts
- The distinction between the SEC record-creation rule (making the record at the time of the event, including the approving principal's name) and the record-retention rule (keeping trade-report blotters for at least 6 years, first 2 easily accessible)
- Why blotters trigger the 6-year retention period as records of original entry, not the shorter 3-year tier
- The three forms of trade-report error correction (cancel, correct, and as-of report) and why each creates a second separate record rather than overwriting the original
- Why retaining both the original and corrected data is mandatory, using the bank-statement analogy of reversing entries plus new postings
- How examiners test whether a principal catches systemic patterns of errors, not just files perfect paperwork for individual mistakes
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