Chapter 3Required Records and Statements

Section § 29200

Explanation

If you work as a broker in California dealing with securities or commodities, you must keep detailed and permanent records of each transaction as a separate item. If you don't, it might be assumed you're engaging in illegal practices like bucketing. These records should always be available for inspection by financial authorities.

Every person doing business as a broker or making contracts as a broker or agent for the purchase or sale of any securities or commodities on any board of trade or exchange shall keep or cause to be kept at their office or place of business correct and permanent records or books of account showing each of such transactions as a separate item. The failure so to keep or cause to be kept such records or books of account is prima facie evidence that any such contract was bucketing or bucketshopping.
Such records or books of account shall at all times be open to inspection by the Commissioner of Financial Protection and Innovation or by any deputy, investigator, or auditor of the Department of Financial Protection and Innovation to whom the commissioner may delegate such authority in writing.
broker records transaction documentation securities transactions commodities exchange bucketing bucketshopping financial inspection recordkeeping requirements permanent records transaction compliance Department of Financial Protection and Innovation
(Amended by Stats. 2022, Ch. 452, Sec. 89. (SB 1498) Effective January 1, 2023.)

Section § 29201

Explanation

If someone has handled an order to buy or sell stocks or commodities for you, they must provide you with a written statement upon request. This statement should include details like who they bought from or sold to, when and where it happened, and the price. If they don't give you this information within 48 hours, it's assumed they might be involved in illegal trading practices called bucketing or bucket shopping.

Every person shall, upon written demand therefor, furnish to any customer or principal for whom he has executed any order for the actual purchase or sale of any securities or commodities on any board of trade or exchange, either for immediate or future delivery, a written statement showing the name of the person from whom the property was bought or to whom it was sold, as the case may be, and the time when, place where, and the price at which it was either bought or sold. If any such person refuses or neglects to furnish such a statement within forty-eight hours after such demand, the refusal or neglect is prima facie evidence that the transaction was bucketing or bucket shopping within the terms of this division.
written demand customer rights order execution actual purchase sale of securities commodities exchange board of trade immediate delivery future delivery transaction details bucketing bucket shopping prima facie evidence 48-hour requirement financial transactions
(Added by Stats. 1949, Ch. 386.)