A firm fails to retain comprehensive client communications and trade records for the required period. Violation?

• A. Standard II.A Material Nonpublic Information
• B. Standard IV.A Loyalty, Prudence, and Care
• C. Standard V.C Record Retention
• D. Standard VI.B Priority of Transactions

Answer: (C)

Keeping client communications and trade records for the required period is a compliance obligation under the CFA Institute standards. This duty ensures there is a verifiable record of the investment decisions, client interactions, and trade activity, which supports accountability, client service, and regulatory or audit reviews. When a firm fails to retain these records for the mandated duration, it breaches the standard that governs Record Retention. The other standards mentioned don’t specifically address keeping records: one covers handling material nonpublic information, another covers loyalty and prudent care to clients, and the last concerns the priority of transactions. Typically, the required retention period is several years (often seven years, with the most recent years kept in an easily accessible location).