Regulatory Financial Requirements: Rapid Fire
Chapters in this video
- 0:00 The FINOP and the cast of firm-level characters
- 1:31 General ledger versus FOCUS report: record and report
- 2:35 Net capital and the reserve formula are not sequential
- 3:25 Rapid-fire net capital minimums: $250K down to $5K
- 5:41 Aggregate indebtedness: 800% and 1,500% ceilings
- 6:31 Carrying agreements allocate but never eliminate
- 7:36 Rapid-fire exam recap
What this video covers
- What the Financial and Operations Principal (FINOP) actually oversees at the firm level versus the account level, and why the FINOP supervises rather than personally prepares every report
- Why the general ledger and the Financial and Operational Combined Uniform Single (FOCUS) report are not the same document, and which one is the private record versus the official Commission filing
- How net capital measures the firm's own regulatory financial resources, while the reserve formula compares customer-related credits to customer-related debits for custodial protection
- The complete ladder of minimum net capital requirements, from $250,000 for firms that carry and hold down to $5,000 for firms that do none of the above
- Why the aggregate indebtedness ratios of 800% and 1,500% are ceilings on debt, not floors on required capital
- How carrying agreements allocate responsibility between introducing and carrying firms but never eliminate the underlying regulatory obligation
Read the full lesson, free
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