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FINRA Proposes Expanding Application of FOCUS Report's ''Off-Balance Sheet'' Schedule

Commentary by Nihal Patel

FINRA proposed expanding the instructions to the Derivatives and Other Off-Balance Sheet Items Schedule ("OBS") pursuant to FINRA Rule 4524 ("Supplemental FOCUS Information"). The proposed instructions include certain non-carrying/non-clearing firms that have significant amounts of off-balance sheet obligations.

FINRA noted "considerable principal trading activities" of certain non-clearing firms during an examination of firms' margining practices in "extended settlement" transactions (including TBA transactions). FINRA stated that it is concerned about firms appropriately monitoring their financial exposure and applying capital charges for these transactions.

Commentary

Nihal Patel

FINRA continues to display a keen interest in how firms are complying with the financial responsibility requirements (i.e., margin and capital) associated with transactions in debt securities.

Primary Sources

  1. FINRA Proposed Amendments

Tags

Regulated Activities
Central Clearing Financial Recordkeeping & Reporting Margining Regulatory Reporting
Regulated Entities
Broker-Dealers
Regulated Products
Securities
Body of Law
Securities Law
Jurisdiction
US - Federal
Organization
FINRA / MSRB / SEC Exchanges / SIPC / Accountants
Sub-Author
FINRA