NASAA Series 66 Uniform Combined State Law ExaminationLaws, Regulations, and Guidelines, including Prohibition on Unethical Business PracticesEasy
A broker-dealer firm has established a policy that all customer complaints, whether written or oral, must be immediately forwarded to the compliance department for review and resolution. The policy also states that all complaints must be logged in a central register. This policy is consistent with which of the following regulatory requirements under the Uniform Securities Act?
- AThe prohibition on unethical business practices by agents.
- BThe requirement for broker-dealers to maintain accurate books and records.
- CThe duty of agents to ensure suitability of recommendations.
- DThe Administrator's power to conduct examinations of broker-dealers.
Show answer & explanationAnswer & explanation
Correct answer: B. The requirement for broker-dealers to maintain accurate books and records.
The policy of logging and forwarding all complaints to the compliance department directly supports the regulatory requirement for broker-dealers to maintain accurate and current books and records. This ensures that a complete record of customer complaints and their resolution is available for regulatory review.
Why the other options are wrong
- A. While related to ethical practices, the policy itself is a record-keeping and supervisory measure.
- C. Suitability is about recommendations, not the handling of complaints after they arise.
- D. The Administrator's power to examine is a regulatory oversight, not a firm's internal policy requirement itself.
BD Customer Complaint Handling
Broker-dealers must establish procedures for handling customer complaints, including logging and maintaining records, as part of their comprehensive record-keeping obligations.
- All complaints (written/oral) must be processed.
- Requires logging and record retention.
- Part of broader books and records requirements.
Memory trick: Every paper, every call, every complaint, cataloged for all.