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  • 2018

    • 18-03 FINRA Announces Updates of the Interpretations of Financial and Operational Rules

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      SEC Financial Responsibility Rules

      Regulatory Notice
      Notice Type

      Guidance
      Referenced Rules & Notices

      Regulatory Notice 08-56
      Regulatory Notice 13-44
      Regulatory Notice 14-06
      Regulatory Notice 14-12
      Regulatory Notice 14-25
      Regulatory Notice 14-38
      Regulatory Notice 15-25
      SEA Rule 15c3-1
      SEA Rule 15c3-3
      SEA Rule 15c6-1
      Suggested Routing

      Compliance
      Finance
      Legal
      Operations
      Regulatory Reporting
      Senior Management
      Key Topics

      Customer Protection
      Net Capital

      Executive Summary

      FINRA is making available updates to interpretations in the Interpretations of Financial and Operational Rules that have been communicated to FINRA by the staff of the SEC's Division of Trading and Markets (SEC staff). The updated interpretations relate to amendments that the SEC adopted to Securities Exchange Act (SEA) Rule 15c6-1 in connection with the standard settlement cycle.1

      Questions concerning this Notice should be directed to:

      •   Yui Chan, Managing Director, Risk Oversight & Operational Regulation (ROOR), at (646) 315-8426 or Yui.Chan@finra.org; or
      •   Adam Rodriguez, Director, Credit Regulation, ROOR, at (646) 315-8572 or Adam.Rodriguez@finra.org.

      Background & Discussion

      On March 22, 2017, the SEC adopted amendments to SEA Rule 15c6-1 in connection with the standard settlement cycle.2 FINRA is updating interpretations in the Interpretations of Financial and Operational Rules that relate to the amendments, as set forth below. Page references are to the hardcopy version. These interpretations are being updated with specific revisions.

      The following interpretations have been revised:

      •   SEA Rule 15c3-1(c)(2)(iv)(E)/11 (Foreign Issued, Foreign Settled Securities—Haircut Alternative to Buy-In for Aged Items) on page 328;
      •   SEA Rule 15c3-3(d)(1)/01 (Margin Section) on pages 2301-2302;
      •   SEA Rule 15c3-3(n)/04 (Date Extensions Due) on page 2562; and
      •   SEA Rule 15c3-3(n)/13 (Reason for Extension Under Paragraph (m)) on pages 2567-2568.

      These interpretation updates are available in portable digital format (pdf) on FINRA's Interpretations of Financial and Operational Rules [http://www.finra.org/industry/interpretationsfor] page.

      Further, SEC staff continues to communicate and issue written and oral interpretations of the financial responsibility and reporting rules. FINRA has previously updated the Interpretations of Financial and Operational Rules on its website in Regulatory Notices 08-56, 13-44, 14-06, 14-12, 14-25, 14-38 and 15-25.

      FINRA member firms and others that maintain the hardcopy version of the Interpretations of Financial and Operational Rules may refer to the accompanying updated pages [http://www.finra.org/sites/default/files/Regulatory-Notice-18-03-Attachment.pdf], containing the aforementioned interpretation updates, which are being made available to enable the replacement of existing pages in the hardcopy version of the Interpretations of Financial and Operational Rules. The filing instructions for the new pages are as follows:

      SEA Rule Remove Old Pages Add New Pages
      15c3-1 328 328
      15c3-3 2301-2302 2301-2302
      15c3-3 2562 2562
      15c3-3 2567-2568 2567-2568

      1. See Securities Exchange Act Release No. 80295 (March 22, 2017), 82 FR 15564 (March 29, 2017) (Securities Transaction Settlement Cycle) (shortening the standard settlement cycle for most broker-dealer transactions from three business days after the trade date ("T+3") to two business days after the trade date ("T+2")). The SEC set September 5, 2017, as the compliance date for the amendments.

      2. See note 1.

    • 18-02 FINRA Requests Comment on Proposed Amendments to FINRA Rule 4521 and New Supplemental Liquidity Schedule; Comment Period Expires: March 8, 2018

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      Liquidity Reporting and Notification

      Regulatory Notice
      Notice Type

      Request for Comment
      Referenced Rules & Notices

      FINRA Rule 4521
      FINRA Rule 4524
      FINRA Rule 6710
      Notice to Members 99-92
      Regulatory Notice 10-57
      Regulatory Notice 15-33
      SEA Rule 15c3-3
      SEA Rule 17a-5
      Suggested Routing

      Compliance
      Legal
      Operations
      Regulatory Reporting
      Risk Management
      Senior Management
      Key Topics

      FOCUS Reports
      Liquidity Reporting and Notification
      Supplemental Liquidity Schedule

      Comment Period Expires: March 8, 2018

      Summary

      FINRA is seeking comment on proposed amendments to FINRA Rule 4521 (Notifications, Questionnaires and Reports) that would require specified member firms to notify FINRA no more than 48 hours after specified events that may signal an adverse change in liquidity risk. FINRA also seeks comment on a proposed new Supplemental Liquidity Schedule (SLS) that member firms with the largest customer and counterparty exposures would file as a supplement to the FOCUS Report. On the new SLS, these firms would report information related to specified financing transactions and other sources or uses of liquidity. The information would include among other things financing term, collateral types and large counterparties.

      FINRA is seeking comment on all aspects of the proposed amendments to Rule 4521 and the proposed new SLS (together, referred to as the "proposal"), including the impact of the proposal on market participants. The proposed amendments to Rule 4521 are available as Attachment A. The proposed SLS and instructions to the SLS are available as Attachments B and C, respectively.

      Questions regarding this Notice should be directed to:

      •   Kris Dailey, Vice President, Risk Oversight & Operational Regulation, at (646) 315-8434;
      •   Kathryn E. Mahoney, Director, Financial Operations Policy Group, at (646) 315-8428; or
      •   Adam H. Arkel, Associate General Counsel, Office of General Counsel, at (202) 728-6961.

      Action Requested

      FINRA encourages all interested parties to comment on the proposal. Comments must be received by March 8, 2018.

      Comments must be submitted through one of the following methods:

      •   Emailing comments to pubcom@finra.org; or
      •   Mailing comments in hard copy to:

      Jennifer Piorko Mitchell
      Office of the Corporate Secretary
      FINRA
      1735 K Street, NW
      Washington, DC 20006-1506

      To help FINRA process comments more efficiently, persons should use only one method to comment on the proposal.

      Important Notes: All comments received in response to this Notice will be made available to the public on the FINRA website. In general, FINRA will post comments as they are received.1

      Before becoming effective, a proposed rule change must be authorized for filing with the SEC by the FINRA Board of Governors, and then must be filed with the SEC pursuant to SEA Section 19(b).2

      Background & Discussion

      Effective monitoring of liquidity and funding risks is an essential element of firms' financial responsibility and an ongoing focus for FINRA's financial supervision programs. To that end, FINRA is issuing this Notice to seek comment on proposed amendments to FINRA Rule 4521 (Notifications, Questionnaires and Reports) and on a new Supplemental Liquidity Schedule (SLS) that specified member firms would file as a supplement to the FOCUS Report. The proposed rule amendments and the new SLS, in combination, are tailored requirements that will improve FINRA's ability to monitor for events that signal an adverse change in the liquidity risk of the firms that would be subject to the new requirements.

      Firms' liquidity and funding stress was a significant factor in the financial crisis of 2008.3 Since that time, FINRA has looked closely at firms' liquidity and funding risk management practices.4 Regulatory Notice 10-57 expressed FINRA's expectation that firms develop and maintain robust funding and liquidity risk management practices and discussed examinations that FINRA had conducted of the practices of selected firms. Regulatory Notice 15-33 provided guidance on liquidity risk management practices and described FINRA's review of policies and practices at selected firms related to managing liquidity needs in a stressed environment. FINRA believes that the proposed requirements are a logical complement to ongoing priorities and guidance that FINRA has communicated to firms.

      In developing the proposal, FINRA has engaged in discussions with industry participants and has tailored the proposal to firms with the largest customer and counterparty exposures. As discussed further below, FINRA is seeking comment on all aspects of the proposal, including the proposal's impact on market participants.

      Following is a summary of the key aspects of the proposal.

      New SLS

      The new, proposed SLS is tailored to larger firms and is intended to provide more detailed information about such firms' liquidity profile than is reflected on the FOCUS Report (Part II, Part IIA or Part II CSE, as appropriate). Under the proposal, unless otherwise permitted by FINRA in writing, the SLS is required to be filed by each carrying or clearing FINRA firm with $25 million or more in total credits, as determined pursuant to the customer reserve formula computation as set forth in SEA Rule 15c3-3 Exhibit A, and by each FINRA firm whose aggregate amount outstanding under repurchase agreements, securities loan contracts and bank loans is equal to or greater than $1 billion, as reported on the most recently filed FOCUS Report.5

      These firms would report information related to specified financing transactions and other sources or uses of liquidity.

      Specifically, they would provide detailed reporting as to their reverse repurchase and repurchase agreements, securities borrowed and securities loaned, bank loans and other credit facilities, total available collateral, margin loans, collateral securing margin loans, deposits at clearing organizations, and cash and securities received and delivered on derivative transactions not cleared through a central clearing counterparty. The required information will enable FINRA to more effectively assess these firms' ability to continue to fund their operations and to meet their settlement, customer and counterparty obligations, thereby enabling FINRA to more effectively evaluate these firms' liquidity and funding profiles and to identify higher risk firms. In particular, the information would facilitate FINRA's efforts to distinguish among firms that may have similar balance sheets but very different liquidity risk profiles that could impact their ability to fund their operations during stress scenarios.6

      Amendments to FINRA Rule 4521

      The SEC approved Rule 4521 as part of FINRA's new, consolidated financial responsibility rules in 2009.7 The rule provides FINRA authority to request information from firms to carry out its surveillance and examination responsibilities. Paragraph (c) of the rule currently requires each carrying or clearing firm to notify FINRA in writing, no more than 48 hours after its tentative net capital as computed pursuant to SEA Rule 15c3-1 has declined 20 percent or more from the amount reported in its most recent FOCUS Report or, if later, the most recent such notification filed with FINRA.

      Under the proposal, additional notification requirements would be applied to the same firms that would be subject to the SLS (that is, unless otherwise permitted by FINRA in writing, each carrying or clearing firm with $25 million or more in total credits, as determined pursuant to the customer reserve formula computation as set forth in SEA Rule 15c3-3 Exhibit A, and each firm whose aggregate amount outstanding under repurchase agreements, securities loan contracts and bank loans is equal to or greater than $1 billion, as reported on the most recently filed FOCUS Report).8 Specifically, the specified firms would be required to notify FINRA in writing, no more than 48 hours after:

      •   the firm becomes aware of a loss of access to secured funding through repurchase agreements, and where such loss, excluding funding collateralized by U.S. Treasury Securities,9 or funding collateralized by securities issued by a U.S. Government Agency10 or Government-Sponsored Enterprise (GSE),11 in the aggregate, across all counterparties, represents 20 percent or more of the highest amount borrowed through such contracts within a 35 rolling calendar day period;
      •   the firm becomes aware of a loss of access to secured funding through securities loans, and where such loss, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or GSE, in the aggregate, across all counterparties, represents 20 percent or more of the highest amount borrowed through such contracts within a 35 rolling calendar day period;
      •   any one of the firm's five largest repurchase agreement counterparties or any one of the firm's five largest securities loan counterparties increases collateral haircuts on the counterparty's repurchase agreements or securities loan contracts with the firm, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or GSE, by 20 percent or more within a 35 rolling calendar day period;
      •   any one of the firm's five largest repurchase agreement counterparties, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or GSE, initiates termination of outstanding repurchase contracts prior to maturity, initiates the option not to renew or rollover the contract, or reduces access to undrawn or unused financing through repurchase contracts by 20 percent or more from the highest amount borrowed through such counterparty within a 35 rolling calendar day period;
      •   any one of the firm's five largest securities loan counterparties, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or GSE, initiates termination of securities loaned contracts prior to maturity, or reduces access to financing through securities loans by 20 percent or more of the highest amount borrowed through such counterparty within a 35 rolling calendar day period;
      •   the firm becomes aware of a reduction in or termination of committed or uncommitted lines of credit from banks, whether secured or unsecured, by 20 percent or more within a 35 rolling calendar day period;
      •   the firm triggers a material adverse change clause in any contract containing such clause, including events of acceleration or default, provided that the notification required pursuant to the rule shall be required within 48 hours after the expiration of any applicable cure period without remedy; or
      •   (only for firms that, pursuant to Rule 4210(g), have received approval from FINRA, or the firm's DEA if other than FINRA, to establish a portfolio margin methodology for eligible participants) the total change in the firm's customer margin balances, or decrease in the firm's free credit balances, in the gross aggregate, is greater than or equal to five percent or $5 billion in one business day, whichever is lower. For purposes of this requirement, the daily customer margin balances and free credit balances would be as determined pursuant to current paragraphs (d)(3)(A) and (d)(3)(B) of the rule.12

      These notification requirements should enable FINRA to be promptly alerted by a firm whose ability to fund its operations has been reduced significantly within a short period of time. FINRA believes that the notifications are consistent with the types of events or conditions that many firms currently monitor for as part of prudent funding and liquidity risk management programs. Further, the notifications dovetail with the reporting that the specified firms would provide pursuant to the proposed SLS, as discussed above.

      Impact on Market Participants and Request for Comment on the Proposal

      The purpose of the proposed SLS is to provide FINRA with more detailed information about the specified firms' liquidity profiles than what is reflected on the current FOCUS Reports. This will enable FINRA to more effectively assess firms' ability to meet their settlement, customer and counterparty obligations and to differentiate between high and low risk firms by analyzing firm-specific risk factors. The primary anticipated net benefit would be that FINRA is provided a more granular level of detail on firms' funding sources such as term or maturity information, collateral quality, haircuts and use of secured versus unsecured financing, so that FINRA can assess whether firms possess adequate liquidity pools to fund their daily operations without relying on relatively less stable sources such as short-term unsecured loans or borrowing against customer collateral.

      A potential significant benefit of this proposal may also arise from the information that can be generated on the interconnectedness of firms through significant counterparty exposure, which is a key component in FINRA's efforts to effectively monitor liquidity and funding risks as a part of its regulatory programs.

      FINRA estimates that, based on the quarterly FOCUS data from 2016, approximately 110 firms, of which approximately half are part of a bank holding company, would be required to file the SLS under the proposal, though the actual number may fluctuate from month to month as a firm will not be required to file the SLS for any month where the firm does not meet the specified thresholds. Based on discussions with a select number of firms, FINRA does not expect the filing of the SLS to create significant direct compliance costs for these firms, as the information required to complete the SLS should be readily available to the firms. However, firms may potentially incur costs associated with processing data to compute certain items on the SLS.

      Similarly, the new notification requirements in the proposed amendments to FINRA Rule 4521 are expected to cause minimal direct burdens on firms that are subject to the SLS, as FINRA believes that firms already monitor events that trigger notification to FINRA as a part of funding and liquidity risk management programs. Some level of one-time direct costs may be incurred by firms that establish automated monitoring tools to comply with the rule. However, to the extent that firms and liquidity providers alter their demand and supply for funding as a result of the proposal, there might be an indirect impact on competition in the funding markets. Firms may choose to diversify their counterparties to mitigate counterparty risk and to report less concentration of counterparties in the SLS. As a result, current counterparties would have to search for other firms that demand funding. Similarly, liquidity providers may potentially shift their client base from specified FINRA firms, to non-specified FINRA firms or to non-firms, to avoid being reported as a counterparty on the SLS. Such change in behavior is expected to be more likely for firms and liquidity providers that are at the margin with respect to the reporting thresholds. These effects may lead to greater search costs or funding costs for some impacted firms.

      As discussed above, FINRA is seeking comment on all aspects of the proposed new SLS and the proposed notification amendments to Rule 4521, including the impact of the proposal on market participants.

      Request for Comment with Regard to the Proposed SLS

      •   Do the items on the proposed SLS sufficiently capture the material secured and unsecured exposures of firms that would be subject to reporting?
      •   Are the proposed thresholds for firms that would be required to report under the proposed SLS appropriate? Are there alternative thresholds that would be more effective in capturing the liquidity risk profiles of firms?
      •   Are the proposed thresholds for the activities that would be required to be reported under the proposed SLS appropriate? What other, if any, information should FINRA consider capturing in order to meet its goals? Should FINRA consider any changes to the proposed items to increase the efficiency or reduce the costs of compliance while maintaining FINRA's ability to meet its goals?
      •   Is the proposed SLS expected to create significant compliance costs, including data collection and processing costs, for the impacted firms? If so, please provide information about these costs, including their potential magnitude, cost drivers that might differ among firms based on their business or business model, and ways that FINRA could mitigate these costs through the design of the collection or reporting mechanism.
      •   Are there additional costs for firms that are part of a bank holding company, stemming from potential discrepancies between the computation and reporting of items on the proposed SLS and other regulatory forms?
      •   To what extent do firms report substantially the same information to other regulators today? Do the proposed SLS items overlap with or differ from items that are reported to other regulators? Should any changes be made to the proposed SLS? If so, why?
      •   What are the potential impacts of the proposed SLS on counterparties? Are some counterparties more likely to be impacted by the proposed requirements than others?
      •   The proposed SLS will require firms to report the gross contract value of all reverse repurchase and repurchase agreements by collateral type, including all intercompany and third party agreements. Should FINRA exclude from the SLS reverse repurchase contracts where the collateral is used to satisfy the SEA Rule 15c3-3 reserve deposit?
      •   Are there any other economic impacts or competitive effects of the proposed SLS?

      Request for Comment with Regard to the Proposed Amendments to FINRA Rule 4521

      •   Under the proposed amendments to Rule 4521, is the specified 35 rolling calendar day timeframe appropriate? Would use of a fixed time period, such as the most recent month-end date or most recently filed report, be more operationally feasible or more cost effective to implement than use of the highest open amount in a rolling period? If yes, would use of a fixed date cause the rule to be less effective?
      •   Should the proposed notification requirement with respect to margin and free credit balances exclude changes resulting from the firm sweeping customer funds to a bank or money market sweep? Should there be other exclusions?
      •   The proposed amendments to Rule 4521 include specified notification requirements with respect to any of the firm's five largest repurchase agreement counterparties or five largest securities loan counterparties. Are the specified requirements appropriate? Why? If not, why not?
      •   The proposed amendments include specified reporting requirements when a firm triggers a material adverse change clause. Are the specified requirements appropriate? Should there be any exclusions from the requirement? Why? If not, why not?

      Additional Request for Comment with Regard to the Impact of the Proposal

      •   Has FINRA identified the appropriate events to trigger notification of a material change in liquidity and funding risk? Are there other events that FINRA should consider?
      •   Instead of listing specific events that trigger notification, should FINRA use different notification triggers? If yes, what should the different triggers be? What are the benefits and drawbacks of such different triggers?
      •   Are the proposed thresholds that would trigger notification to FINRA relevant and do they appropriately address material changes in liquidity and funding risks? Are there alternative thresholds that FINRA should consider?
      •   Do the proposed notifications with respect to secured and unsecured funding sources appropriately address the sources of funding risk? Are there other unsecured financing sources and collateral types that FINRA should consider for notification events?
      •   Do impacted firms currently monitor events that may potentially trigger notification to FINRA? How likely are firms to change their risk management practices due to the proposed notification requirements?
      •   Are the proposed notification requirements with respect to liquidity and funding events likely to impact the supply and demand for funding? Specifically, are impacted firms likely to alter their behavior, collateral management and choice of counterparties in the funding markets?
      •   Are there any other economic impacts or competitive effects of the proposed notification requirements?

      1. FINRA will not edit personal identifying information, such as names or email addresses, from submissions. Persons should submit only information that they wish to make publicly available. See NTM 03-73 (November 2003) (NASD Announces Online Availability of Comments) for more information.

      2. See SEA Section 19 and rules thereunder. After a proposed rule change is filed with the SEC, the proposed rule change generally is published for public comment in the Federal Register. Certain limited types of proposed rule changes, however, take effect upon filing with the SEC. See SEA Section 19(b)(3) and SEA Rule 19b-4.

      3. See, e.g., Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (January 2011).

      4. See Regulatory Notice 10-57 (November 2010) (Risk Management) and Regulatory Notice 15-33 (September 2015) (Liquidity Risk). However, even prior to the financial crisis, FINRA noted the importance of risk management practices. See, e.g., Notice to Members 99-92 (November 1999) (Risk Management Practices) (setting forth a joint statement by the SEC, NASD and NYSE on broker-dealer risk management practices). FINRA has also discussed liquidity risk in its recent Annual Regulatory and Examination Priorities Letters.

      5. Under the proposal, the SLS must be filed within 22 business days after the end of each month. The SLS need not be filed for any period where the firm does not meet the $25 million or $1 billion thresholds.

      6. Upon receiving comment on the proposed SLS, FINRA proposes to file the SLS with the SEC pursuant to Rule 4524. Rule 4524 provides that, as a supplement to filing FOCUS reports required pursuant to SEA Rule 17a-5 and FINRA Rule 2010, each member, as FINRA shall designate, shall file such additional financial or operational schedules or reports as FINRA may deem necessary or appropriate for the protection of investors or in the public interest. The rule provides that the content of such schedules or reports, their format, and the timing and the frequency of such supplemental filings shall be specified in a Regulatory Notice (or similar communication) issued pursuant to the rule. The rule further provides that FINRA shall file with the SEC pursuant to Section 19(b) of the Exchange Act the content of any such Regulatory Notice (or similar communication) issued pursuant to the rule.

      7. See Regulatory Notice 09-71 (December 2009) (SEC Approves Consolidated FINRA Rules Governing Financial Responsibility).

      8. Supplementary Material .01 of Rule 4521 provides that, for purposes of the rule, all requirements that apply to a member that clears or carries customer accounts shall also apply to any member that, operating pursuant to the exemptive provisions of SEA Rule 15c3-3(k)(2) (i), either clears customer transactions pursuant to such exemptive provisions or holds customer funds in a bank account established thereunder. By way of clarification, FINRA notes that firms otherwise subject to the rule by virtue of Supplementary Material .01 would not be subject to the new requirements if they do not meet the specified $25 million or $1 billion thresholds.

      9. FINRA Rule 6710(p) defines "U.S. Treasury Security" to mean "a security issued by the U.S. Department of the Treasury to fund the operations of the federal government or to retire such outstanding securities."

      10. FINRA Rule 6710(k) defines "agency" to mean a United States executive agency as defined in 5 U.S.C. 105 that is authorized to issue debt directly or through a related entity, such as a government corporation, or to guarantee the repayment of principal or interest of a debt security issued by another entity. The term excludes the U.S. Department of the Treasury in the exercise of its authority to issue U.S. Treasury Securities as defined under FINRA Rule 6710(p). Under 5 U.S.C. 105, the term "executive agency" is defined to mean an "Executive department, a Government corporation, and an independent establishment."

      11. FINRA Rule 6710(n) defines GSE to have the meaning set forth in 2 U.S.C. 622(8). Under 2 U.S.C. 622(8), a GSE is defined, in part, to mean a corporate entity created by a law of the United States that has a Federal charter authorized by law, is privately owned, is under the direction of a board of directors, a majority of which is elected by private owners, and, among other things, is a financial institution with power to make loans or loan guarantees for limited purposes such as to provide credit for specific borrowers or one sector and raise funds by borrowing (which does not carry the full faith and credit of the Federal Government) or to guarantee the debt of others in unlimited amounts.

      12. Paragraphs (d)(3)(A) and (d)(3)(B) address free credit balances and margin balances for purposes of specified monthly reporting requirements under current paragraph (d) of Rule 4521.


      ATTACHMENT A

      Below is the text of the proposed rule change. Proposed new language is underlined; proposed deletions are in brackets.

      * * * * *

      4000. FINANCIAL AND OPERATIONAL RULES

      * * * * *

      4520. Financial Records and Reporting Requirements
      4521. Notifications, Questionnaires and Reports
      (a) Each carrying or clearing member shall submit to FINRA, or its designated agent, at such times as may be designated, or on an ongoing basis, in such form and within such time period as may be prescribed, such financial and operational information regarding the member or any of its correspondents as FINRA deems essential for the protection of investors and the public interest.
      (b) Every member approved by the SEC pursuant to SEA Rule 15c3-1 to use the alternative method of computing net capital contained in Appendix E to that Rule shall file such supplemental and alternative reports as may be prescribed by FINRA.
      (c)
      (1) Each carrying or clearing member shall notify FINRA in writing, no more than 48 hours after its tentative net capital as computed pursuant to SEA Rule 15c3-1 has declined 20 percent or more from the amount reported in its most recent FOCUS Report or, if later, the most recent such notification filed with FINRA. For purposes of this paragraph, "tentative net capital as computed pursuant to SEA Rule 15c3-1" shall exclude withdrawals of capital previously approved by FINRA.
      (2) Unless otherwise permitted by FINRA in writing, each carrying or clearing member with $25 million or more in total credits, as determined pursuant to the customer reserve formula computation as set forth in SEA Rule 15c3-3 Exhibit A, and each member whose aggregate amount outstanding under repurchase agreements, securities loans contracts and bank loans is equal to or greater than $1 billion, as reported on the member's most recently filed FOCUS Report, shall notify FINRA in writing, no more than 48 hours after:
      (A) the member becomes aware of a loss of access to secured funding through repurchase agreements, and where such loss, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or Government-Sponsored Enterprise, in the aggregate, across all counterparties, represents 20 percent or more of the highest amount borrowed through such contracts within a 35 rolling calendar day period;
      (B) the member becomes aware of a loss of access to secured funding through securities loans, and where such loss, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or Government-Sponsored Enterprise, in the aggregate, across all counterparties, represents 20 percent or more of the highest amount borrowed through such contracts within a 35 rolling calendar day period;
      (C) any one of the member's five largest repurchase agreement counterparties or any one of the member's five largest securities loan counterparties increases collateral haircuts on the counterparty's repurchase agreements or securities loan contracts with the member, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or Government-Sponsored Enterprise, by 20 percent or more within a 35 rolling calendar day period;
      (D) any one of the member's five largest repurchase agreement counterparties, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or Government-Sponsored Enterprise, initiates termination of outstanding repurchase contracts prior to maturity, initiates the option not to renew or rollover the contract, or reduces access to undrawn or unused financing through repurchase contracts by 20 percent or more from the highest amount borrowed through such counterparty within a 35 rolling calendar day period;
      (E) any one of the member's five largest securities loan counterparties, excluding funding collateralized by U.S. Treasury Securities, or funding collateralized by securities issued by a U.S. Government Agency or Government-Sponsored Enterprise, initiates termination of securities loaned contracts prior to maturity, or reduces access to financing through securities loans by 20 percent or more of the highest amount borrowed through such counterparty within a 35 rolling calendar day period;
      (F) the member becomes aware of a reduction in or termination of committed or uncommitted lines of credit from banks, whether secured or unsecured, by 20 percent or more within a 35 rolling calendar day period;
      (G) the member triggers a material adverse change clause in any contract containing such clause, including events of acceleration or default, provided that the notification required pursuant to this Rule shall be required within 48 hours after the expiration of any applicable cure period without remedy; or
      (H) the total change in the member's customer margin balances, or decrease in the member's free credit balances, in the gross aggregate, is greater than or equal to five percent or $5 billion in one business day, whichever is lower; provided, however, that paragraph (c)(2)(H) of this Rule shall apply to members that, pursuant to Rule 4210(g), have received approval from FINRA, or the member's DEA if other than FINRA, to establish a portfolio margin methodology for eligible participants. For purposes of this paragraph (c)(2)(H), the daily customer margin balances and free credit balances shall be as determined pursuant to paragraphs (d)(3)(A) and (d)(3)(B) of this Rule.
      (d)
      (1) Unless otherwise permitted by FINRA in writing, members carrying margin accounts for customers are required to submit, on a settlement date basis, the information specified in paragraphs (d)(2)(A) and (d)(2)(B) of this Rule as of the last business day of the month. If a member has no information to submit, a report should be filed with a notation thereon to that effect. Reports are due as promptly as possible after the last business day of the month, but in no event later than the sixth business day of the following month. Members shall use such form as FINRA may prescribe for these reporting purposes.
      (2) Each member carrying margin accounts for customers shall submit reports containing the following customer information:
      (A) Total of all debit balances in securities margin accounts; and
      (B) Total of all free credit balances in all cash accounts and all securities margin accounts.
      (3) For purposes of this paragraph (d):
      (A) Only free credit balances in cash and securities margin accounts shall be included in the member's report. Balances in short accounts and in special memorandum accounts (see Regulation T of the Board of Governors of the Federal Reserve System) shall not be considered as free credit balances.
      (B) Reported debit or credit balance information shall not include the accounts of other FINRA members, or of the associated persons of the member submitting the report where such associated person's account is excluded from the definition of customer pursuant to SEA Rule 15c3-3.
      (e) Unless a specific temporary extension of time has been granted, there shall be imposed upon each member required to file any report, notification or information pursuant to this Rule, a late fee as set forth in Schedule A Section 4(g)(1) to the FINRA By-Laws.
      (f) For purposes of this Rule, any report filed pursuant to this Rule containing material inaccuracies shall be deemed not to have been filed until a corrected copy of the report has been resubmitted.

      • • • Supplementary Material: --------------

      .01 Members Operating Pursuant to the Exemptive Provisions of SEA Rule 15c3-3(k)(2)(i). For purposes of this Rule, all requirements that apply to a member that clears or carries customer accounts shall also apply to any member that, operating pursuant to the exemptive provisions of SEA Rule 15c3-3(k)(2)(i), either clears customer transactions pursuant to such exemptive provisions or holds customer funds in a bank account established thereunder.

      * * * * *


      ATTACHMENT B

      FINRA SLS

      Supplemental Report to FOCUS REPORT

      Supplemental Liquidity Schedule ("SLS")

      (Please read instructions before completing form)

      NAME OF BROKER-DEALER   SEC FILE NO.
      ADDRESS OF PRINCIPAL PLACE OF BUSINESS FIRM ID NO.
      (No. and Street)     FOR PERIOD ENDING (MM/DD/YY)
      (City) (State) (Zip Code)  
      NAME OF PERSON COMPLETING THIS REPORT
      TELEPHONE NO. OF PERSON COMPLETING THIS REPORT
       

      All amounts should be reported in thousands.

      REVERSE REPURCHASE AND REPURCHASE AGREEMENTS Reverse Repurchase (000s) Repurchase (000s)
      1. U.S. Treasury Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity _______________ _______________
         c. Forward Starting $ $
      2. U.S. Government Agency & Government-Sponsored Enterprise Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity _______________ _______________
         c. Forward Starting $ $
      3. Equity Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity _______________ _______________
         c. Forward Starting $ $
      4. Investment Grade Corporate Obligations    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity _______________ _______________
         c. Forward Starting $ $
      5. Other Collateral    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity _______________ _______________
         c. Forward Starting $ $
           
      6. Total at Tri-Party Custodian or DTCC $ $
      7. TOTAL $ $
      Top 5 Counterparties: Reverse Repurchase and Repurchase Agreements
      Reverse Repurchase Counterparty Name Contract Value (000s) Repurchase Counterparty Name Contract Value (000s)
             
      1. $ 1. $
      2. $ 2. $
      3. $ 3. $
      4. $ 4. $
      5. $ 5. $
      SECURITIES BORROWED AND SECURITIES LOANED Securities Borrowed (000s) Securities Loaned (000s)
      1. U.S. Treasury Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity ______________ ______________
         c. Forward Starting $ $
      2. U.S. Government Agency & Government-Sponsored Enterprise Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity ______________ ______________
         c. Forward Starting $ $
      3. Equity Securities    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity ______________ ______________
         c. Forward Starting $ $
      4. Investment Grade Corporate Obligations    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity ______________ ______________
         c. Forward Starting $ $
      5. Other Collateral    
         a. Open and Overnight $ $
         b. Term $ $
      Weighted Average Maturity ____________ _____________
         c. Forward Starting $ $
           
      6. Total Guaranteed by a CCP $ $
      7. TOTAL $ $
      Top 5 Counterparties: Securities Borrowed and Securities Loaned
      Securities Borrowed Counterparty Name Contract Value (000s) Securities Loaned Counterparty Name Contract Value (000s)
             
      1. $ 1. $
      2. $ 2. $
      3. $ 3. $
      4. $ 4. $
      5. $ 5. $
      BANK LOAN AND OTHER CREDIT FACILITIES
        Total (000s) Affiliate Non-Affiliate
        Committed (000s) Uncommitted (000s) Committed (000s) Uncommitted (000s)
       
      1. U.S. Treasury, U.S. Government Agency & Government-Sponsored Enterprise Securities          
         a. Open and Overnight $ $ $ $ $
         b. Term $ $ $ $ $
      2. Equity Securities  
         a. Open and Overnight $ $ $ $ $
         b. Term $ $ $ $ $
      3. Other Collateral          
         a. Open and Overnight $ $ $ $ $
         b. Term $ $ $ $ $
      4. Unused Portion of Secured Credit Facilities $ $ $ $ $
      5. Unsecured Credit Facilities          
         a. Drawn Amounts $ $ $ $ $
         b. Undrawn Amounts $ $ $ $ $
      TOTAL AVAILABLE COLLATERAL (Free Box)
        Total Market Value
      1. U.S. Treasury Securities $
       
      MARGIN LOANS
        Balance (000s)
      1. Demand Loans $
      2. Term Loans—Drawn $
         a. Weighted Average Maturity of Term Loans ______________  
      3. Term Loans—Undrawn $
      COLLATERAL SECURING MARGIN LOANS    
      a. Top 5 Equity Securities
      CUSIP # ISSUER Market Value (000s)
      1.   $
      2.   $
      3.   $
      4.   $
      5.   $
      b. Top 5 Fixed Income Securities (excluding U.S. Treasury, Government Agency & Government-Sponsored Enterprise Securities)
      CUSIP ISSUER Market Value (000s)
      1.   $
      2.   $
      3.   $
      4.   $
      5.   $
      DEPOSITS AT CLEARING ORGANIZATIONS
        Amount Required (000s) Amount Posted (000s) Proprietary Largest Single Intra-Month Call (000s) Date
      1. DTCC (total) $ $ $ $  
         a. NSCC $ $ $ $  
         b. FICC $ $ $ $  
      2. OCC $ $ $ $  
      3. CME $ $ $ $  
      4. ICE $ $ $ $  
      5. Other>10% of $ $ $ $  
      CASH AND SECURITIES RECEIVED AND DELIVERED ON DERIVATIVE TRANSACTIONS NOT CLEARED THROUGH A CCP
      Cash and Securities Delivered In to Collateralize Receivables  
      Counterparty Name Affiliate (Y/N) Total Cash (000s) Total Securities
             
      1.   $ $
      2.   $ $
      3.   $ $
      4.   $ $
      5.   $ $
      Cash and Securities Delivered Out to Collateralize Payables
      Counterparty Name Affiliate (Y/N) Total Cash (000s) Total Securities
      1.   $ $
      2.   $ $
      3.   $ $
      4.   $ $
      5.   $ $

      ATTACHMENT C

      SUPPLEMENTAL SCHEDULE TO FOCUS REPORT

      Supplemental Liquidity Schedule

      GENERAL INSTRUCTIONS

      The Supplemental Liquidity Schedule ("SLS") is intended to provide more detailed information about a member's liquidity profile than what is reflected on the FOCUS Report (Part II, Part IIA or Part II CSE, as appropriate). Unless otherwise permitted by FINRA in writing, the SLS is required to be filed by each carrying or clearing FINRA member with $25 million or more in total credits, as determined pursuant to the customer reserve formula computation as set forth in SEA Rule 15c3-3 Exhibit A, and by each FINRA member whose aggregate amount outstanding under repurchase agreements, securities loans contracts and bank loans is equal to or greater than $1 billion, as reported on the member's most recently filed FOCUS report.

      The SLS must be filed within 22 business days after the end of each month. A member need not file the SLS for any period where the member does not meet the $25 million or $1 billion thresholds.

      SPECIFIC INSTRUCTIONS

      Note: For explanations of the types of securities to be included in the requested line items of the SLS, please refer to "Explanation of Terms" on pages 3 and 4 of these instructions.

      Reverse Repurchase and Repurchase Agreements

      Report the gross contract value of all reverse repurchase and repurchase agreements by collateral type, including all intercompany and third party agreements. Exclude intracompany agreements between desks within the same legal entity. Report collateral upgrade transactions based on the contract type for each leg of the transaction (i.e., report Master Repurchase Agreements ("MRA") contracts in the Reverse Repurchase and Repurchase Agreements section and Master Stock Loan Agreement ("MSLA") contracts in the Securities Borrowed and Securities Loaned section, as discussed further below).

      Compute the "Weighted Average Maturity" on term agreements only (i.e., exclude open and overnights). For contracts that contain an option feature that permits the counterparty to choose not to renew with an agreed-upon notice period ("evergreen contracts"), use the earliest possible close date.

      Report in "Other Collateral" the gross contract value of all reverse repurchase and repurchase agreements not otherwise reported in the previous product categories.

      For "Total at Tri-Party Custodian or DTCC," report the gross contract value of all reverse repurchase and repurchase agreements where the collateral is held at a tri-party custodian or at Depository Trust & Clearing Corporation (DTCC), including DTCC's subsidiary Fixed Income Clearing Corporation (FICC).

      For "Top 5 Counterparties: Reverse Repurchase and Repurchase Agreements," report the top 5 counterparties after netting (in accordance with ASC 210-20-45-1 and ASC 210-20-45-11). Where contracts have been novated to FICC, FICC should be reported as the counterparty. Where the counterparty contracted with the member through an agent (Agency Repo), report the name of the underlying principal as counterparty.

      Securities Borrowed and Securities Loaned

      Report the gross contract value of all securities borrowed and securities loaned agreements by collateral type, including all intercompany and third party agreements. Exclude intracompany agreements between desks within the same legal entity. Report collateral upgrade transactions based on the contract type for each leg of the transaction (i.e., report Master Repurchase Agreement contracts in the Reverse Repurchase and Repurchase Agreements section and Master Securities Lending Agreement contracts in the Securities Borrowed and Securities Loaned section).

      Compute the "Weighted Average Maturity" on term agreements only (i.e., exclude open and overnight contracts).

      Report in "Other Collateral" the gross contract value of all securities borrowed and securities loaned agreements not otherwise reported in the previous product categories, if applicable.

      "Total Guaranteed by a CCP" shall include the gross contract value of all securities borrowed and securities loaned agreements guaranteed by a Central Clearing Counterparty.

      "Top 5 Counterparties: Securities Borrowed and Securities Loaned" shall include the Top 5 Counterparties after netting (in accordance with ASC 210-20-45-1 and ASC 210-20-45-11). Where the counterparty contracted with the member through an agent bank (Agency Lending), report the name of the underlying principal as the counterparty.

      Bank Loan and Other Credit Facilities

      Report the dollar value of bank loan and other credit facilities (for example, subordinated loans, liens of credit, secured demand notes, etc.) by collateral type for secured lines, separating affiliated sources from unaffiliated sources.

      For purposes of this SLS, a committed line of credit is one where the lender is contractually committed to lend to the member, provided the member has not violated any conditions or covenants in the terms of the contract.

      Total Available Collateral (Free Box)

      Report U.S. Treasury Securities (see "Explanation of Terms") in the member's possession or control that can be re-hypothecated, are otherwise unencumbered and are not required to be returned upon demand of the owner.

      Margin Loans

      Report margin loans, including non-purpose loans extended by the member. For purposes of this SLS, "Demand" loans are those that are callable for immediate repayment. "Term" loans are those that are not callable for immediate repayment and have stated maturity dates.

      Collateral Securing Margin Loans

      For "Top 5 Equity Securities," report the top five equity securities by total market value, collateralizing all margin loans.

      For "Top 5 Fixed Income Securities," report the top five fixed income securities, excluding U.S. Treasury, Government Agency & Government-Sponsored Enterprise Securities, collateralizing all margin loans.

      Deposits at Clearing Organizations

      Report the total amount required to be on deposit, as well as the total amount of cash and securities on deposit, at clearing organizations at the report date. The amount may include the clearing deposit, adequate assurance deposits, additional liquidity deposits, guarantee fund deposits, etc. In addition, report in this section the largest single call intra-month by the clearing organization.

      For "Other>10% Total," report the total clearing deposit at any one clearing organization that is greater than 10% of the total amounts required and on deposit at all clearing organizations, if applicable.

      Cash and Securities Received and Delivered on Derivative Transactions Not Cleared Through a CCP

      Report cash and securities used to collateralize marks to market on derivative transactions that are not cleared through a central clearing counterparty ("CCP"). For purposes of this SLS, "derivatives transactions" include non-regular way settlement transactions (including To Be Announced ("TBA") securities and delayed delivery and settlement transactions) as well as swap contracts.

      For "Cash and Securities Delivered In to Collateralize Receivables," report the top five counterparties with gross derivative mark-to-market receivables, by counterparty name, and identify whether the derivative counterparty is an affiliate.

      For "Cash and Securities Delivered Out to Collateralize Payables," report the top five counterparties with gross derivative mark-to-market payables, by counterparty name, and identify whether the derivative counterparty is an affiliate.

      EXPLANATION OF TERMS

      U.S. Treasury Securities

      Direct obligations of the U.S. Treasury, including but not limited to, bills, notes, bonds, Treasury Inflation-Protected Securities (TIPS), U.S. Treasury Strips (IO) or (PO), and Treasury floating rate notes.

      U.S. Government Agency & Government-Sponsored Enterprise Securities

      Securities issued by a United States federal agency, or a United States Government-Sponsored Enterprise, including agency securities guaranteed as to principal or interest by the U. S. government (e.g., GNMA securities).

      Equity Securities

      Preferred and common stocks, warrants and ETFs issued by any domestic or foreign issuer.

      Investment Grade Corporate Obligations

      Investment grade debt securities issued by any corporation, whether domestic or foreign. Corporate obligations include but are not limited to non-convertible, convertible, floating rate debt securities and ETNs.

      Other Collateral

      All other securities not otherwise included in the other categories.

    • 18-01 Final Statements for Broker-Dealers, Investment Adviser Firms, Agents and Investment Adviser Representatives, and Branches; Payment Deadline: January 22, 2018

      View PDF

      BD and IA Renewals for 2018

      Regulatory Notice
      Notice Type

      Renewals
      Suggested Routing

      Compliance
      Legal
      Operations
      Registration
      Senior Management
      Key Topics

      IARDTM
      Registration
      Renewals
      Web CRD®

      Executive Summary

      FINRA is issuing this Notice to help firms review, reconcile and respond to their Final Statements in E-Bill as well as view the reports that are currently available in Web CRD/IARD for the annual registration renewal process. The payment deadline is January 22, 2018.

      Please direct questions concerning this Notice to the FINRA Call Center at (301) 869-6699.

      Background & Discussion

      Final Statements

      On January 2, 2018, Final Statements became available for viewing and printing in E-Bill. These statements reflect the final status of broker-dealer, registered representative, investment adviser firm, investment adviser representative, and branch registrations and/or notice filings as of December 31, 2017. Any adjustments in fees owed because of registration terminations, approvals, IA firm registrations, reporting status or notice filings subsequent to the Preliminary Statement are included in this final reconciled statement. Renewal reports are available in Web CRD/IARD for request, print and/or download.

      If the amount assessed on the Final Statement is greater than the amount assessed on the Preliminary Statement, the additional renewal fees are due by January 22, 2018. If the amount assessed on the Final Statement is less than the amount assessed on the Preliminary Statement, FINRA has issued a credit to the firm's Flex-Funding Account.

      The Final Statements include the following fees (if applicable):

      •   Web CRD/IARD system processing fees;
      •   FINRA branch office and branch processing fees;
      •   participating Self-Regulatory Organization (SRO) maintenance fees, if applicable;
      •   state broker-dealer firm, branch and agent (AG) renewal fees, if applicable;
      •   state investment adviser firm, branch and investment adviser representative (RA) renewal fees, if applicable; and
      •   FINRA annual statutory disqualification fees for registered individuals.

      Renewal Payment

      Web CRD/IARD issues a refund if a firm owes less for registrations at year-end than what was reflected on the Preliminary Statement. FINRA transferred overpayments to firms' Flex-Funding Accounts on January 2, 2018. Firms that have a credit balance in their FlexFunding Accounts may submit a refund request [http://www.finra.org/industry/e-bill-user-guide#Refunds] through E-Bill or leave the funds in their account to pay for other future fees.

      If the Final Statement reflects an amount due, FINRA must receive payment no later than January 22, 2018. Firms may pay electronically through E-Bill, send a wire transfer or mail a check; however, FINRA highly recommends that firms remit funds via E-Bill. Firms are encouraged to check their Renewal Statements to confirm FINRA has received payment and that the firm's Renewal Statement balance is paid in full.

      Electronic Payment via E-Bill

      Firms may submit electronic payments to fund their Renewal Accounts through E-Bill [http://www.finra.org/industry/finra-e-bill]. FINRA does not charge for using E-Bill; however, firms should verify if their banks charge additional fees. Firms must enroll to use E-Bill.

      Please Note: Firm users with the proper entitlement may transfer funds from their Flex-Funding Account to their Renewal Account or transfer funds between affiliated firms at any time by using E-Bill. For further details, please refer to the E-Bill User Guide [http://www.finra.org/industry/e-bill-user-guide].

      ACH/Wire Transfer and Check Payments

      Wire transfer and check payments are initially deposited into a firm's Flex-Funding Account. Beginning January 22, 2018, if sufficient funds are available, FINRA will systematically transfer funds from Flex-Funding Accounts to Renewal Accounts. Firms do not have to wait for FINRA to systematically transfer funds on January 22 as firms have the ability to transfer funds to their Renewal Accounts using E-Bill. Funds will only be systematically transferred if the entire renewal amount owed is available in the firm's Flex-Funding Account.

      ACH/Wire Transfer

      To initiate a wire or ACH transfer, instruct your firm's bank to contact Bank of America and provide your bank with the following information:

      Wire ABA Number: 026009593
      ACH ABA Number: 054001204
      Beneficiary: FINRA
      FINRA Account: 226005684771
      Reference Number: Firm CRD number

      Inform your bank to credit funds to the FINRA bank account and to only use your firm's CRD number as a reference. Record the confirmation number of the wire transfer provided by your bank.

      If you send your wire transfer by 2 p.m., ET, your firm may confirm receipt the next business day by reviewing your Flex-Funding Account online or calling the FINRA Gateway Call Center at (301) 869-6699. Wire payments received after 2 p.m., ET, should be available in two business days. Please note that while wire transfers are received by FINRA on the same day they are initiated, ACH bank transfers typically take several days longer to be received by FINRA.

      Checks

      Checks should be made payable to FINRA and your firm's CRD number should be written on the check memo line. Processing of check payments may take up to two business days. Please account for mail delivery and payment processing time when sending payment. Write the address on an envelope exactly as noted in this Notice:

      U.S. Mail Overnight or Express Delivery
      FINRA
      P.O. Box 418911
      Boston, MA 02241-8911

      Note: This P.O. Box will not accept courier or overnight deliveries.
      Bank of America Lockbox Services
      FINRA 418911
      MA5-527-02-07
      2 Morrissey Blvd.
      Dorchester, MA 02125

      Provide the following phone number, if required:(800) 376-2703

      Renewal Reports

      Renewal reports include all individual registrations renewed for 2018; however, they do not include registrations that were "pending approval" or "deficient" at year-end. Firms should examine their reports carefully to ensure that all registration approvals are correct. FINRA also suggests that firms include these reports in firms' permanent records.

      •   Firm Renewal Report—lists individuals included in the Renewal Program and includes billing codes (if the firm provided them).
      •   Branches Renewal Report—lists each branch registered with FINRA and/or with any other regulator that renews branches through Web CRD/IARD and for which the firm is being assessed a fee.
      •   Approved AG Reg Without FINRA Approval Report—contains all individuals who are not registered with FINRA, but are registered with one or more jurisdictions. Firms should request this report as soon as possible to determine if they need to request any FINRA registrations or terminate jurisdiction registrations.

      Discrepancies

      If your firm believes there are discrepancies on your Final Statement, report them in writing directly to FINRA by January 22, 2018. Along with your letter describing the discrepancy, please include a copy of your Final Statement and any supporting documentation to:

      FINRA
      Registration & Disclosure—Regulatory Services & Operations
      9509 Key West Avenue
      Rockville, MD 20850

      If you have questions regarding renewal discrepancies, please call FINRA at (240) 386-4182.