Annual Audited Financial Report Submission

The Financial Industry Regulatory Authority (FINRA) announced in Regulatory Notice 11-46 that commencing November 8, 2011, member firms having a fiscal year end on or after September 30, 2011 are required to file their annual audited financial reports electronically through the firm’s FINRA Gateway. The filings must include the signed and notarized oath and affirmation required pursuant to Securities and Exchange Act Rule 17a-5(e)(2). FINRA relied on NASD Rule 3170 as the basis for the change in process.

General Ledger Supervision

Pursuant to FINRA Rule 4523 (“Rule 4523”), every firm must now designate an associated person and a supervisor to be responsible for each general ledger account. The associated person should be responsible for each general ledger account and any account of like function used by a firm, and must control and oversee entries into each such account and determine that the account is current and accurate as necessary to comply with all applicable FINRA rules and federal securities laws. The supervisor on the other hand, will be responsible for reviewing each account to determine that each account it is current and accurate, and that any items that become aged or uncertain as to resolution are promptly identified for research and possible transfer to a suspense account as required, but at a minimum no less than on a monthly basis. Proper documentation for items that are transferred to a suspense account will have to be maintained supporting the rationale for the transfer and the ultimate resolution of said items.

Courtesy of the LeGaye Law Firm

Michael Schaps, Co-Author

Daniel E. LeGaye, Co-Author