Financial Responsibility and Funding: Rapid Fire

What this video covers

• How net capital (NC) is computed, which assets are non-allowable (furniture, prepaid expenses, goodwill), and why securities take haircuts rather than full value
• The trap of electing the basic or alternative computation method with the designated examining authority (DEA), or FINRA, never the securities and exchange commission (SEC)
• The early-warning ladder: 150% FINRA trigger for carrying/clearing firms, 120% SEC 24-hour notice, and 100% same-day notice, plus who uses which threshold
• How the customer protection rule applies the 140% test to debit balance (not market value) to identify excess margin securities requiring possession or control
• The split in margin authority: Federal Reserve Reg T governs initial margin at 50%, while FINRA governs maintenance margin at 25% long and 30% short
• FOCUS filing cadences: Part I monthly within 10 business days, Part II or IIA quarterly within 17 business days, Part III annual within 60 calendar days, and the PCAOB auditor registration requirement
• SIPC coverage of $500,000 per customer per capacity with a $250,000 cash sub-limit inside that total, and fidelity bond deductibles that can cut net worth when they exceed 10% of coverage