Record retention

E

ethicsgirl

New member
Joined
Jun 18, 2026
Messages
0
Reaction score
0
So CFA states to always follow the stricter law/Standard. So when it comes to record retention they say to follow regulatory guidance. So let’s say it says 5 years (or the firm compliance policy says 5 years), but then CFA states 7 years. Which one should we follow?
 
@ethicsgirl,
7 years.Your question has the answer.
However I did find some of fellow candidates confused on account of the undernoted discussion:
Local Requirements
“Local regulators often impose requirements on members, candidates, and their firms related to record retention that must be followed. Firms may also implement policies detailing the applicable time frame for retaining research and client communication records. Fulfilling such regulatory and firm requirements satisfies the requirements of Standard V(C). In the absence of regulatory guidance or firm policies, CFA Institute recommends maintaining records for at least seven years.”
This should mean fulfilling local requirements satisfies the requirements of Standard V(c).
“In the absence of regulatory guidance….cfa institute recommends maintaining for at least seven years”.But if 5 years is the local norm “Regulatory guidance or firm policies” are not ABSENT.
And V(C) DOES NOT talk about applying stricter norms….so 5 years may “satisfy”…..reason for the confusion.Is that the reason for your doubt,though not stated?
Read with Standard IA :Professionalism.”Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities.In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation.”
Even if Local laws are NOT ABSENT(present and less conservative),In case of conflict stricter law will prevail as per I(A).
 
Thank you. I thought the same thing that it was 7 years, however a question in the textbook didn’t find that as a violation that the company used 5 and not 7 years. The question stated that a PM implemented electorinc record-retention policy. In accordance with her policy, all records for fund, are scanned and electronically stored. Another PM maintained the same records in hard-copy format for 5 years that he managed the ‘Fund’. 1st PM has begun process of scanning all of past records of the ‘Fund’. However the 2nd PM insists that he’ll continue to maintain only hard-copy records of the ‘Fund’ for 5 years required by regulators.
Question: are record-retention policies of both PM #1 and PM #2 consistent with CFA Standards?
A. Yes
B. No, PM#1’s policy is not consistent.
C. No, PM#2’s policy is not consistent.
I thought you always follow the stricter law, so in this case it’s CFA which says 7 years. But the answer to the questions is A. Although there’s no option that they are both incorrect in terms of the lenght of time.
 
The question tries to figure out whether there is any preference between hard copy/scanned copy.
But saying that the policies are consistent,amounts to saying 5 years is acceptable,and V(c) can be applied standalone baisis,I(A)notwithstanding.I tilted in favour of IA to be more conservative(they say err on the side of caution for ethics!)
Errata is silent on it.So I presume the institute validates VA’s applicability as standalone.
Thanks ethicsgirl.Welcome to raise more such questions…
 
Acc. to the CFAI there is no matter what kind of copy does the firm store: electronically or hard-copy. Suffice it to say that a copy of the docs is available.
5 years as there are local regulations in place.
Elementary Dear… provided a useful insight on the strictness of the local law vs. the CFAI standards (which in this case are absent). I dodn’t consider it when solving the question perhaps because it wasn’t exmplicitely indicated whether the law is stricter or not.
 
isn’t it that the 7 years are a recommendation and not an obligation ?
 
More subtle than it looks at first glance. Thanks everyone for the explanations
 
ethicsgirl wrote:
So CFA states to always follow the stricter law/Standard. So when it comes to record retention they say to follow regulatory guidance. So let’s say it says 5 years (or the firm compliance policy says 5 years), but then CFA states 7 years. Which one should we follow?
Click to expand...
CFA doesn’t “state” 7 years, the CFAI *recommends* 7 years. Big difference if the question is what’s recommended versus what’s required. It can seem nuanced, but pay attention to requirements versus recommendations both in the text and on the tests/exam.
 
You must log in or register to reply here.
Back
Top