Reporting Requirements for Clearing Firms
Chapters in this video
- 0:00 The introducing firm, the clearing firm, and who holds the data
- 1:56 November 30, 2023: when FINRA turned off the tap
- 2:46 What the INSIte program historically collected
- 3:25 The five surveillance systems you must distinguish
- 5:01 Why Priya is never off the hook for suitability
- 5:45 The introducing firm's reporting obligation: zero
- 6:12 Account info vs. order info: keep the lanes separate
- 6:31 Rapid-fire exam recap
What this video covers
- Why the clearing firm, not the introducing firm, owes the reporting obligation under the clearing-firm reporting rule, and how the "path of least resistance" logic drives this allocation
- The exact scope of historically reported data: account identifiers, registered representative assignments, account types, balances, and transaction activity
- Why November 30, 2023 matters: FINRA discontinued data collection (the INSIte program) while the rule itself remains fully in force, making it a "ghost rule"
- How clearing-firm reporting differs from the Consolidated Audit Trail (CAT), trade reporting facilities (TRF, ADF, ORF), the former Order Audit Trail system (OATS), and short interest reporting
- Why the introducing firm retains all suitability and supervisory obligations despite the clearing firm holding the books and records and handling the data reporting
- How to spot exam traps that conflate customer-account information (clearing-firm reporting) with order and trade information (CAT and trade reporting facilities)
- The correct answer when a question asks what report the introducing firm must file under this rule: none, zero reporting obligation
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