August 25, 2015

FINOP Services

Your firm’s Financial and Operations Principal (“FINOP”) should do more than submit FOCUS reports. We believe a FINOP should be an expert on the net capital, recordkeeping, and financial rules governing your firm’s business. Our FINOPs will discharge a broad range of duties and be integral members of your firm’s management. By using one of our outsourced FINOPs, your firm will save significant money by avoiding the need to hire an in-house FINOP.

Requirement to Have a FINOP
A broker-dealer must have at least one Financial and Operations Principal (“FINOP”). Depending on the broker-dealer’s net capital requirement, the FINOP must take and pass either the Series 27 Qualification Examination or the Series 28 Qualification Examination. In addition, the FINOP must have the requisite experience before he or she can serve as the primary FINOP for a broker-dealer.

Role of the FINOP
The FINOP plays an important role in ensuring investor protection by being responsible for the broker-dealer’s compliance with applicable net capital, recordkeeping, and other financial and operation rules. The duties of a FINOP include:

  • final approval and responsibility for the accuracy of financial reports submitted to any duly established securities industry regulatory body;
  • final preparation of such reports;
  • supervision of individuals who assist in the preparation of such reports;
  • supervision of and responsibility for individuals who are involved in the actual maintenance of the member’s books and records from which such reports are derived;
  • supervision and/or performance of the member’s responsibilities under all financial responsibility rules promulgated pursuant to the provisions of the Act;
  • overall supervision of and responsibility for the individuals who are involved in the administration and maintenance of the member’s back office operations; and
  • any other matter involving the financial and operational management of the member.

FINOP Engagement
We will register a qualified individual with FINRA to be your firm’s FINOP.  The FINOP will then be able to communicate with regulators on matters related to your firm’s compliance with net capital requirements.

Next, we identify the appropriate personnel at your firm with whom we will regularly communicate (such as personnel from accounting, compliance, and senior management).

We then determine the means by which we will access your financial data. We will do a comprehensive review of your current financial information and any recent filings.

Upon establishing a reasonable level of comfort with your firm’s financial statements, we will begin regularly preparing net capital computations and FOCUS filings. With your firm’s approval, the FINOP will electronically submit FOCUS filings through the eFOCUS system.

Services Rendered by Our FINOPs
Many firms lack a complete understanding of the professional services rendered by a FINOP. Here is a list of services that our FINOPs can perform for your firm:

  • Register with your firm as FINOP (Series 27 or Series 28);
  • File monthly and quarterly FOCUS Reports;
  • Prepare net capital computations;
  • File the Supplemental Statement of Income (SSOI);
  • File Form Custody;
  • Prepare the annual Schedule 1 filing;
  • File the annual audit through Firm Gateway;
  • File SIPC Reports;
  • Prepare and review the trial balance;
  • Prepare the income statement;
  • Prepare and analyze the balance sheet;
  • Make journal entries;
  • Reconcile bank and clearing firm statements;
  • Perform trend analysis of financial statements;
  • Meet with management to discuss FOCUS filings and compliance with net capital requirements;
  • Conduct onsite visits to inspect financial and operational records;
  • Communicate with your firm’s personnel to gather information on changes to the firm; and
  • Respond to the SEC, FINRA, and other regulators.

Contact Us
To learn more about our FINOP services, contact us or call 1-404-841-1010.