Study for the Series 6 Exam

If you plan to take the Series 6 exam, you should be aware that the test includes questions on retention requirements for books and records. Both the SEC and FINRA put high value on a brokerage firm creating and maintaining written records of everything having to do with communications between representatives and customers. For example, did you know that the SEC and FINRA require written records of customer dealings that occur on social media, such as X (formerly known as Twitter) and Facebook? These are known as "off-channel" communications. So if you as a Series 6 registered rep communicate with your customers via Twitter, your firm is obligated to keep written records of your communications and to supervise what you say and/or the pitch that you make to prospective customers about investment products. There is an important message underlying the penalties imposed on Off-Channel Communications—don't communicate with your customers via social media because, if you do, yo...

FINRA makes available a Series 6 Content Outline for those planning to sit for the Series 6. This Content Outline describes the subject matter of the Series 6 Exam. The Series 6 Content Outline includes Section 3.4, covering correspondence with clients and mentioning books and records retention requirements. From time to time, the SEC issues press releases about penalties and charges brought against broker/dealers and advisers. Here is one that imposes penalties on 10 firms for inadequate record-keeping of electronic communications with clients, called "off-channel communications." I include the SEC Release here because it demonstrates that a broker or adviser must treat the rules as having real life consequences, potentially bringing serious penalties and large fines for non-observance. Bob Eder in his  Study for the Series 6 Exam  covers correspondence and advertising regulations, with a special emphasis on keeping records, including electronic and off-channel communica...

Picture yourself CCO (Chief Compliance Officer) of ABC Advisory Firm. One of your I.A. representatives makes use of her personal smart phone to stay in contact with clients by texting, as she finds it easier to communicate in writing on her personal phone when she is out of the office. Does the SEC's Rule on Keeping Written Records of Client Communications include such electronic written messages or SMS if they are sent via personal computers, cell phones, et al? The answer is emphatically yes! The Record Keeping Rule applies, even though the rep or registered associate uses his or her own electronic device or smart phone to send the written communication or message. The SEC recently brought charges against Scotia Capital and HBSC for widespread record-keeping failures, attributed to permitting associates to send written communications via their personal devices. (See SEC Press Release 2023-91.) Here's what the SEC said in this case: "The SEC’s investigation of HSBC Securi...