General Securities Sales Supervisor (Series10) Practice Exam

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How long must records of original entry regarding cash receipts and disbursements be maintained under SEC rules?

3 years
6 years
10 years
6 months

The correct answer is: 6 years

The requirement to maintain records of original entry, which includes cash receipts and disbursements, is specified under SEC regulations, particularly Rule 17a-4. According to these rules, such records must be kept for a minimum of six years. This duration ensures that sufficient documentation is available for regulatory review and can support transparency in financial operations. The six-year retention period is important for compliance purposes, as it aligns with the SEC's objective to monitor trading practices and safeguard against misuse of financial information, protecting both investors and the integrity of the markets. Maintaining these records for six years allows firms to keep a comprehensive history of cash transactions, which can be critical during audits and inspections, as well as for resolving any disputes that may arise related to account details or transactions.