Our office has experienced extensive selling away, unauthorized, outside business activities and suitability problems in one-person offices. It should be noted that South Dakota has the statutory authority to charge the broker-dealer for the cost of the examination, including time and salary for the examiner. Any action that delays that process is more costly to the broker-dealer. Any needed document that is not held at the local office increases the amount of time spent on the examination, resulting in increased costs. Sales scripts should be retained at the local office.
Sales scripts are frequently a road map to abusive sales practices.
The local office should also retain correspondence. Not only is it a help during an examination, but it is also a record that can support the broker's defense against customer complaints. Thank you for the opportunity to comment about the reproposed rules on books and records. We appreciate the efforts of the Commission to address state regulator needs along with the needs of the federal regulators. If you have any questions about these comments, please do not hesitate to contact me.