NASAA Books & Records Rule
The NASAA Model Rule on Books and Records establishes comprehensive requirements for the creation, maintenance, and retention of business records by state-registered investment advisors, covering financial records, client documentation, communications, and compliance materials.
Key Requirements
Financial Records
Advisors must maintain journals, ledgers, and financial statements that accurately reflect all business transactions, including fee calculations, revenue, and expenses.
Client Documentation
Complete records of all client agreements, investment advisory contracts, financial plans, suitability documentation, and correspondence must be maintained.
Communications Archive
All written and electronic communications related to advisory services, recommendations, and business activities must be preserved, including emails and instant messages.
Retention Periods
Records must be retained for the period specified by the state (typically 5 years), with the first 2 years in an easily accessible location. Some records may require longer retention.
Electronic Record-Keeping Standards
Electronic records must be maintained in a format that is readily accessible, searchable, and can be produced for examination. Systems must prevent unauthorized alteration.
Compliance Documentation
Records of compliance reviews, exception reports, supervisory procedures, and training activities must be maintained as part of the books and records requirement.
State Adoption Status
Adoption of NASAA model rules varies by state. Some states adopt the model rule directly, while others have their own rules covering the same requirements.
Visit the State Adoption Tracker for a complete per-state breakdown. Data sourced from NASAA model rule matrix and NV 2024 Legislative Survey. Last verified March 2026.
Common Violations
Avoid these frequently cited deficiencies during state examinations.
Incomplete Record Retention
Failing to maintain all required categories of records, particularly electronic communications and social media activity.
Inadequate Organization
Records exist but are disorganized or difficult to locate during an examination, causing delays and raising concerns about compliance program adequacy.
Missing Client Files
Incomplete client documentation including missing suitability questionnaires, unsigned agreements, or absent correspondence records.
Electronic Records Gaps
Not properly archiving emails, text messages, or other electronic communications related to advisory activities.
Best Practices
Frequently Asked Questions
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