RIA Glossary / Examinations & Regulatory Readiness

Books and Records Rule (Rule 204-2)

Quick Answer
The Books and Records Rule (Rule 204-2) is the SEC regulation specifying which records registered investment advisers must create and retain, including financial records, client communications, advertising materials, and compliance documentation — generally for a minimum of five years.
Reviewed by Sam Carter, Director of Registration Services
Last reviewed September 22, 2026

What Is the Books and Records Rule (Rule 204-2)?

Rule 204-2 covers a broad range of records: trade blotters, client account records, communications with clients, advertising and marketing materials, written policies and procedures, and documentation supporting performance claims, among others. Most records must be kept for five years, the first two in an easily accessible location, though some categories (like the firm’s formation documents) must be retained for the life of the business.

State-registered advisers are typically subject to similar recordkeeping rules under their state’s adopted version of the rule, which may include minor variations from the federal standard.

Why it Matters

Recordkeeping gaps are one of the most common exam deficiencies — often not because a firm did anything wrong substantively, but because it can’t produce documentation proving it followed its own procedures.

Frequently Asked Questions

How long do I need to keep client communications?

Generally five years from the end of the fiscal year in which the communication was made, though specific categories may differ.

Do text messages and social media count as records?

Yes — business communications on any platform, including texts and social media, generally fall under the rule’s recordkeeping requirements.
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