SEC Adopts Revisions to Broker-Dealer Recordkeeping Requirements

Washington, DC, November 20, 2001 - The Securities and Exchange Commission recently adopted revisions to Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934, which govern the recordkeeping requirements of federally registered brokers and dealers. These revisions, which will be effective May 2, 2003, are the culmination of a rulemaking initiative begun by the SEC in 1996. The final amendments include revisions recommended by the Institute. The revised rules contain many significant provisions, including:

• revised customer account information requirements;
• maintenance of memoranda of brokerage orders and dealer transactions;
• compliance with requirements for communications with the public;
• maintenance of customer complaint information;
• availability of firm personnel to explain records and their content;
• creation of a list of firm principals; and
• maintenance of certain Rule 17a-3 records in the “local office.”