Operations, Recordkeeping, and Compliance
The paper trail
MSRB Rule G-8 requires records of orders, confirmations, account information, correspondence, and complaints; Rule G-9 requires preservation for six years, with the first two years readily accessible. Confirmations under Rule G-15 must be sent at or before completion of the transaction, although municipal fund securities have some flexibility - check the current rule text and the firm's procedures before relying on a quarterly confirmation practice. Customer statements, order tickets, suitability information, and advertising review records should all be retrievable.
Compliance routines
Rule G-27 supplies the operating rhythm: written procedures, principal review of transactions and correspondence, complaint investigation and response, annual compliance review, and documentation of the review. Continuing education has a regulatory element and a firm element. Anti-money-laundering, privacy, and business-continuity programs apply alongside the MSRB rules. Municipal fund securities are generally not reported through the MSRB's real-time trade reporting system, so the principal should not assume trade-reporting data will supply the audit trail.
Worked example
An examiner asks for evidence that a 529 recommendation was suitable. The principal should be able to produce the new-account form, the representative's notes or profile, the confirmation or statement, the principal's review evidence, and any complaint file. If any link is missing, the supervisory system - not just the representative - is exposed.
Rule of thumb
If it is not documented, it did not happen; a principal's signature should mean the file was actually reviewed.