From CFAI qn bank:
Bukenya then reviews Jacaranda’s record-keeping policy. Currently, the policy requires retention of hard copies of all supporting documentation for investment recommendations and decisions made during the last five years. This policy meets the new risk-based regulations. Client meeting minutes and communication logs are kept electronically and backed up on a remote server. Fund managers and research analysts are responsible for maintaining their own personal notes and research models. This policy also applies to Jacaranda’s independent research contractor, Mathew Ochieng, who (for security reasons) does not have access to the company’s server. Ochieng, who only undertakes research for Jacaranda, sends his research reports to the head of research, who then archives these electronic copies.
Q. Jacaranda’s record-keeping policy is most likely in violation of Standard V(C)–Record Retention with regard to the:
A. keeping of hard and electronic copies.
B. retention of personal notes and research models.
C. retention time frame.
B is correct. Standard V(C)–Record Retention requires the retention and maintenance of records to support the investment analyses, recommendations, actions, and other investment-related communications with clients and prospective clients. Because the independent research contractor provides research only for Jacaranda, he would not necessarily be considered a third-party research provider. Thus, he would be required to send his research reports to the firm along with his underlying supporting analysis and financial models. Therefore, Jacaranda does not meet the record retention requirements. The standard allows firms to keep hard copies and/or electronic copies of documents. In addition, although it recommends files be retained for a minimum of seven years, Jacaranda is still in compliance with the standard in that it meets local regulatory requirements.
I don’t understand the part in bold. If it is a third-party research provider, he won’t need to send the reports to the firm?
CFAI text don’t mention anything about third-party research providers record retention issues.