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SIE Books and Records and Privacy Requirements

Books and records covers what a firm must keep and for how long — the three-year and six-year retention rules — alongside Regulation S-P, which governs customer privacy: the initial and annual privacy notices, and the customer’s right to opt out of sharing with non-affiliated third parties.

Practise this topic freeSee the full outline
Understanding Trading, Customer Accounts and Prohibited Activities · 31%131 questions0% hard
31%of the exam is Understanding Trading, Customer Accounts and Prohibited Activities, the section this topic sits in.
131questions on this topic in the PrepScore bank.
47%are apply-level questions — the dominant cognitive demand here.
5are EXCEPT / NOT items, where the answer is the odd one out.
What the SIE asks

What you actually need to know

  • Which records are kept three years and which six.
  • Regulation S-P: the privacy notice at account opening, and annually after.
  • The opt-out right for sharing with non-affiliated third parties.
  • Customer account records, and how updates must be confirmed.
How this topic behaves

What 131 questions on it look like

Not one question in this topic is rated hard, and 32% are easy. This is a topic to bank marks in, not to agonise over.

43% of the questions demand analysis rather than recall — you are asked to judge a described situation, not to name a definition.

compliance judgment100%

Question-type mix across the 131 questions in this topic.

From the bank

Three real books and records and privacy requirements questions

With the explanation — which is the part that teaches.

compliance judgment · medium · recall

Under Regulation S-P, when must a broker-dealer first deliver a privacy notice describing its information-sharing practices to a new retail customer?

  1. AOnly if the customer later asks for it in writing
  2. BAt the time the customer relationship is established (account opening)correct
  3. CWithin 30 days after the customer's first trade settles
  4. DOnly once the firm decides to share data with a nonaffiliated party
Why B is correct

Reg S-P requires an initial privacy notice no later than when the customer relationship is established, i.e., at account opening. A separate annual notice follows thereafter.

compliance judgment · medium · understand

After delivering its initial privacy notice at account opening, how often must a firm generally provide its Reg S-P privacy notice to a continuing customer thereafter?

  1. ANever again unless the customer requests an update
  2. BEvery three years regardless of changes
  3. CAt least annually during the continuation of the customer relationshipcorrect
  4. DEvery month an account statement is sent
Why C is correct

Reg S-P requires an annual privacy notice for the duration of the customer relationship, in addition to the initial notice given at account opening.

compliance judgment · medium · analyze

A firm gave a customer the required privacy notice when the account was opened two years ago but has sent nothing about privacy since. What is the compliance problem?

  1. AThe firm has likely failed to deliver the required annual privacy noticescorrect
  2. BThere is no problem; one privacy notice at account opening fully satisfies Reg S-P
  3. CPrivacy notices are required only for institutional accounts
  4. DThe firm should have delivered the first notice only after the first trade
Why A is correct

Reg S-P requires both an initial notice and ongoing annual notices. Two years with no further notice signals a failure to provide the required annual privacy notices.

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FAQ

Books and Records and Privacy Requirements questions

When must a privacy notice first be delivered?

Not later than when the customer relationship is established — at account opening — with a further notice at least annually thereafter.

How long must firms keep records?

It depends on the record. The SIE tests the split between the three-year and six-year categories rather than a single blanket period.

Can a customer stop a firm sharing their information?

They can opt out of disclosure to non-affiliated third parties. Some sharing — for servicing the account, or as required by law — is not subject to opt-out.
Last reviewed 2026-08-28. Exam facts sourced to FINRA’s SIE exam page and the FINRA SIE content outline. Question counts describe the PrepScore bank, not the exam.
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