SEC Rule 17a-3 — Records Creation Requirements

Overview

SEC Rule 17a-3 prescribes the specific books and records that every registered broker-dealer must create as part of its business operations. These records form the foundation of a firm's compliance infrastructure, enabling regulators to assess whether a firm is operating in compliance with securities laws and protecting its customers.

The rule works in tandem with Rule 17a-4, which governs how long these records must be retained. Together, they constitute the primary recordkeeping framework for broker-dealers.

Official citation: 17 CFR § 240.17a-3

Who It Applies To

Rule 17a-3 applies to all broker-dealers registered with the SEC under Section 15 of the Securities Exchange Act of 1934. This includes carrying firms, introducing firms, market makers, and any other entity operating as a broker-dealer.

Key Requirements

Trade blotters: Daily records of all purchases and sales of securities, receipts and deliveries, and all other debits and credits.
General ledger: Reflecting all assets, liabilities, income, expense, and capital accounts.
Customer account ledgers: Itemized daily records of each customer's account showing all purchases, sales, receipts, deliveries, and other transactions.
Securities records: Showing separately for each security all long and short positions carried for the firm's own account and for customer accounts.
Order tickets: Memoranda of each order received, including the time of entry, the terms and conditions, and the account for which it was entered.
Customer account records: Account record for each customer with essential identifying information, furnished to the customer within 30 days of account opening and at intervals of no more than 36 months after that, for accounts that require a suitability determination.

Where Loffa Fits

Freefunds Verified Direct (FVD)

Letters of Free Funds: Rule 17a-3 doesn't list Letters of Free Funds. They're communications your firm keeps under Rule 17a-4(b)(4); see the Rule 17a-4 guide.
What FVD records: FVD records each request, the response, each status change, and the user who made it, with timestamps and the trade details on the letter. Its APIs and secure file transfer connect it to your back-office systems. Loffa retains the records it processes; your firm's own books-and-records obligations stay with your firm.

Recent Updates

2022 amendments (effective 2023): The SEC adopted amendments to Rule 17a-4 modernizing electronic recordkeeping requirements, including an audit-trail alternative to WORM storage. These amendments also affect how records created under Rule 17a-3 are preserved.
36-month cycle: For accounts that require a suitability determination, the firm must furnish the account record to the customer at intervals of no more than 36 months.