General Securities Sales Supervisor (Series10) Practice Exam

How long must employment records, including Form U-4, be retained after an employee leaves a municipal firm?

1. A 1 year

2. B 2 years

3. C 4 years

4. D 6 years

The correct answer is: C 4 years

The retention period for employment records, including Form U-4, after an employee leaves a municipal firm is established by regulatory requirements. Specifically, these records must be kept for a minimum of four years. This period is consistent with the guidelines set forth by the Financial Industry Regulatory Authority (FINRA), which governs the retention of various records and forms within the securities industry. Form U-4, which is the Uniform Application for Securities Industry Registration or Transfer, contains important information about an individual's employment history, qualifications, and registrations. Retaining these records for four years allows firms to maintain a comprehensive history of their former employees, which can be crucial for compliance, regulatory audits, and addressing any potential inquiries regarding an individual’s professional background. The other time frames mentioned may not meet regulatory compliance standards, which is why they aren’t the appropriate choices. Retention requirements are designed to ensure that firms manage and preserve essential documentation consistently to protect both the firm and its clients, as well as to uphold the integrity of the securities industry as a whole.