FINRA Updates the Interpretations of Financial and Operational Rules (with Lofchie Comment)

FINRA released updates to the Interpretations of Financial and Operational Rules to reflect the recommendations that the SEC Division of Trading and Markets made to FINRA. The updated interpretations consist of specified additions, revisions and rescissions that relate to Exchange Act Rules 15c3-1 ("Net Capital Requirements for Brokers or Dealers"), 15c3-1b ("Adjustments to Net Worth and Aggregate Indebtedness for Certain Commodities Transactions (Appendix B to Rule 15c3-1)"), 15c3-1d("Satisfactory Subordination Agreements (Appendix D to Rule 15c3-1)"), 15c3-3 ("Customer Protection - Reserves and Custody of Securities"), and 17a-5 ("Reports to Be Made by Certain Brokers and Dealers").

Lofchie Comment: Most of the updates seem to reflect moderately long-standing interpretations. Nonetheless, given that it is so close to year-end (and year-end financials), FINOPs should do at least a quick review of these rule changes to determine whether they might have missed any of these interpretations and whether any of them might have an affect on a firm's year-end numbers. It appears that the most significant changes relate to introducing firms (in particular as to their assets held at clearing firms) and as to foreign currency positions.

See: FINRA Regulatory Notice 13-44.