BOOKS AND RECORDS OVERVIEW
Advisers Act Rule 204-2 – the books and records rule – is the longest in the act at more than 4,000 words. It’s also among the oldest rules.
 
This can give firms fits because a rule written more than 50 years ago doesn’t always clearly correspondent to a world that’s now measured in bytes and bites.
 
A transparent obligation under the rule, though, is to maintain “not less than” the last five years of key records, and the two most recent years of these record “in an appropriate office of the investment adviser.”
 
The rule goes into depth about what types of records must be kept. They include bills and statements, written client communications, advisory agreements, among others. It’s worth noting that records used to construct past performance should be maintained regardless of how old they are – so that a firm can proof to examiners the veracity of its calculations.
 
Relevant books and records must be “true, accurate and current.” Firms that find themselves cited in enforcement cases tied to this rule often keep sloppy records, can’t locate or produce them or falsify them.

Still have questions? Click here to share your questions with our editors.

© 2017 UCG. ALL RIGHTS RESERVED | PRIVACY POLICY | TERMS & CONDITIONS | ABOUT US | CONTACT US