FINRA Highlights Changes To eFOCUS Reporting Requirements For SBS Dealers

FINRA Highlights Changes To eFOCUS Reporting Requirements For SBS Dealers

In 2019, the Securities and Exchange Commission (SEC) adopted amendments that revise certain of the Financial and Operational Combined Uniform Single (FOCUS) reporting and annual report requirements that apply to brokers and dealers pursuant to SEA Rule 17a-5 to take account of security-based swap (SBS) activity. Further, as a result of these changes, to avoid duplication with the SEC’s new requirements, FINRA has revised the Supplemental Inventory Schedule (SIS) so that members that file the new FOCUS Report Part II, pursuant to the SEC’s amendments, will no longer need to file the SIS. The SEC’s new FOCUS reporting requirements, and the revised SIS, will apply beginning with FOCUS reports and SIS filings that report on the period ending October 31, 2021 and are required to be filed in November 2021. Additionally, FINRA has redesigned its eFOCUS filing system to add certain enhancements and features to improve members’ filing experience. Members that are quarterly filers may access the new system on FINRA Gateway beginning June 24, 2021. The new system will be made available to monthly filers beginning in July 2021.

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On-site Due Diligence

Footnote 74 Under SEC’s Customer Protection Rule

The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc. (FINRA) recently issued Frequently Asked Questions (FAQs) concerning the exemption provisions of SEC Rule 15c3-3, the Customer Protection Rule. Prior to this guidance, even if they did not meet all requirements for (k)(2)(i) or (k)(2)(ii) on the FOCUS Report, firms were choosing to file for a (k)(2)(i) if they did not have custody. To address this issue, the SEC released footnote 74 to allow these “Non-Covered Firms” to properly file for exemption under Rule 15c3-3.

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FINRA Report Filing

FINRA Report Filing Due Dates for 2021

FINRA recently released a notice about 2021 and first quarter of 2022 FINRA Report Filing Due Dates to assist members in their financial reporting obligations for Annual Report, Financial and Operational Combined Uniform Single (FOCUS), Form Custody, and supplemental FOCUS Report filings.

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FINRA Conference Call Part 2

Highlights from FINRA Small Firm Conference Call: Part 2

Earlier this month, FINRA hosted a Small Firm Conference Call to discuss updates and implications of COVID-19 (Coronavirus). If you were not able to listen to the call live, a replay recording is available on demand. This recording provides and discusses many highlights noted in the FAQs Related to Coronavirus Pandemic.

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Amendment to FINRA RULE 4524: OBS Requirements

In April 2016, the Securities and Exchange Commission (SEC) approved a proposed amendment to FINRA Rule 4524 (Supplemental FOCUS Information). The approved amendment alters the instructions to the Derivatives and Other Off-Balance Sheet Items Schedule (OBS), expanding the application of the OBS to certain non-carrying or non-clearing firms with significant amounts of off-balance sheet obligations.

Newly filing firms were required to file their initial OBS disclosing off-balance sheet information on or before August 2, 2016. Carrying or clearing firms that were already subject to the OBS reporting requirements before the Read More…