Episode 62: End of Year Books and Records Retention Review

Core Compliance offers advice for your end of year books and records retention review on episode 62 of the CCO Buzz.


CCO Buzz: Hello and welcome back to the CCO Buzz! On this episode, we’re joined by a Sr. Compliance Consultant. He is here to give us recommendations for areas to consider as we close out the compliance year, specifically regarding books and records best practices.

We’ve come to the end of the year and many Chief Compliance Officers are taking steps to close out the compliance year. Do you have any areas of consideration or best practices for this closeout?

Senior Compliance Consultant: Yes, one of the things I’ve always found very helpful is conducting a Books and Records review.

CCO Buzz: What do you mean by a Books and Records [review] when it comes to a Registered Investment Advisor?

Senior Compliance Consultant: Well, the Investment Advisors Act requires that Registered Investment Advisors retain certain Books and Records, for certain periodicities, depending on the particular type of record.

CCO Buzz: Do you have some examples of the types of records?

Senior Compliance Consultant: Sure, for example, agreements and contracts, advertising and marketing records, annual reviews, [and] client files are just some of the examples.

CCO Buzz: What kind of review do you recommend?

Senior Compliance Consultant: Well, the first thing I would recommend is that you ensure that your firm has a Books and Records retention policy and that it’s up to date. Then I would ensure that my firm is actually retaining the records. And lastly, I would recommend purging records that are no longer required to be retained.

CCO Buzz: But we live in the age of the Cloud. Is destruction of records that are no longer required to be retained important if the records no longer take up physical space?

Senior Compliance Consultant: That’s a great question, I get that question quite a bit. I have always felt that it was important to maintain the records destruction periodicity even if the firm is using the cloud. In my opinion, retaining records that are out of retention periodicity have the potential to create confusion, particularly regarding advertisements and marketing, as to what records are current and which ones aren’t. It should also be noted that any records you’re retaining can be requested during a regulatory examination or other regulatory matter. With this in mind, retention is the overall requirement.

CCO Buzz: So you believe this type of review lends itself well to end of the year housekeeping?

Senior Compliance Consultant: Absolutely. Because of the stated periodicities in this requirement, I think the end of the year is the perfect time to perform this kind of review.

CCO Buzz: Well thank you for the recommendations.

Senior Compliance Consultant:  Of course, and if anyone requires assistance with creating policies around books and records retention, Core Compliance & Legal Services can certainly help and we can be reached at (619) 278-0020.

CCO Buzz: Well that’s it for this week’s episode. If you’d like additional information, please check out our website at www.corecls.com. You can also follow us on Facebook, LinkedIn, or Twitter @CoreCls. Thank you, and we hope you tune-in to next week’s episode of the CCO Buzz.


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