A deal closes, the wire clears, and the junior banker's real work begins: archiving the file, settling the syndicate account, and confirming the next raise can skip registration entirely by living inside an exemption. Miss a recordkeeping rule or misread a Regulation D threshold, and the firm's clean close turns into a violation.
When a transaction closes, the banker assembles the deal file, the permanent archive of everything that documents the offering. It holds correspondence with the underwriting group and the issuer, copies of pitch and marketing materials, road-show presentations and logistics, book-building records (the demand and pricing data gathered during the order period), and the final prospectuses. This file is the evidence trail that the deal was conducted properly, so completeness matters.
Two SEC rules split the recordkeeping universe. SEC Rule 17a-3 lists the records a broker-dealer must MAKE (blotters, order tickets, ledgers, customer account records). SEC Rule 17a-4 lists how long those records must be PRESERVED and in what format.
Common mistakes
- Flipping 17a-3 and 17a-4. Rule 17a-3 is records to be MADE; Rule 17a-4 is records to be PRESERVED. Candidates routinely reverse the pair.
- Wrong syndicate settlement window. FINRA Rule 11880 requires settlement within 90 days, not 30 or 60, of the syndicate settlement date.
- Confusing 506(b) and 506(c) capabilities. Only 506(b) allows up to 35 non-accredited investors (no advertising); only 506(c) permits general solicitation (accredited-only, verified). Both allow unlimited dollars.
Bottom line
- SEC Rule 17a-3 governs records to be MADE; Rule 17a-4 governs records to be PRESERVED; FINRA Rule 4511 sets general requirements with a 6-year default retention
- FINRA Rule 11880 requires syndicate accounts to be settled within 90 days of the syndicate settlement date
- Exchange Act Section 10A requires the issuer's auditor to detect and report illegal acts up the chain to management, the audit committee, and ultimately the SEC
- Regulation A: Tier 1 raises up to $20 million and Tier 2 up to $75 million in a 12-month period
Exam shortcut
"Make = 17a-3, Keep = 17a-4, General = 4511 (6 years)." Map any recordkeeping question to one of these three before reading the choices. Dollar ladder for exemptions: $5M (4(a)(5)) < $10M (504) < $20M (Reg A Tier 1) < $75M (Reg A Tier 2). The two 506 rules are unlimited; distinguish them by advertising (506(c)) versus 35 non-accredited (506(b)).
The full lesson (about 2,421 words, 16 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- B19
- B20
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