Securities Trader Representative (Series 57) Practice Exam

Question: 1 / 400

What action does a firm take when it retains customer communications for legal compliance?

They discontinue trading

They destroy all previous records

They store records for a specific time period

When a firm retains customer communications for legal compliance, the action taken is to store records for a specific time period. This is aligned with regulatory requirements that necessitate firms to maintain records of customer interactions and communications for a designated duration. Such regulations ensure that firms can provide documentation if an inquiry arises, thus protecting customer interests and maintaining market integrity.

Storing records for a specific time period allows the firm to comply with various legal and regulatory obligations, such as those mandated by the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). The retention period can vary based on the type of communication and applicable regulations, but it reflects a proactive approach to compliance and risk management.

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They make records publicly accessible

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