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SEC Proposes RIA Books and Records Amendment as Part of Trade Date Amendment

February 11, 2022

By Douglas Kamin, Managing Director

Tucked away in the Securities and Exchange Commission’s (“SEC”) new Rule 15c6-2 proposal on February 9th, regarding the shortening of the standard settlement cycle for most securities transactions from two business days (T+2) to one business day (T+1), is a proposal to amend Rule 204-2 under the Investment Advisers Act of 1940 (the “Advisers Act”).

Among other things, Rule 15c6-2 would prohibit broker-dealers who have agreed with a customer to engage in an allocation, confirmation, or affirmation process from effecting or entering into a contract for the purchase or sale of a security on behalf of that customer unless the broker-dealer has also entered into a written agreement that requires the allocation, confirmation, affirmation to be completed as soon as technologically practicable and no later than the end of the day on trade date in order to complete settlement in the timeframes required under Rule 15c6-1(a)

The SEC proposes to amend Rule 204-2 under the Advisors Act by adding a requirement in paragraph (a)(7)(iii) that advisors maintain records of each confirmation received, and any allocation and each affirmation sent, with a date and time stamp for each allocation and affirmation that indicates when the allocation or affirmation was sent to the broker or dealer if the advisor is a party to a contract under proposed Rule 15c6-2.  The proposed time and date stamp for these communications would occur when they were “sent to the broker or dealer.” To meet this proposed requirement, an advisor generally should time and date stamp records of each allocation and affirmation to the nearest minute.

The Commission proposes to require compliance with each of the proposed rules and rule amendments by March 31, 2024.



This article is not a solicitation of any investment product or service to any person or entity. The content contained in this article is for informational use only and is not intended to be and is not a substitute for professional financial, tax or legal advice.