Recordkeeping Rules - FINRA Rules

Rule 2270 - Disclosure of Financial Condition to Customers
A member shall make available to inspection by any bona fide regular customer, upon request, the information relative to such member's financial condition as disclosed in its most recent balance sheet, prepared either in accordance with such member's usual practice or as required by any state or federal securities laws, or any rule or regulation therein.

Rule 2910 - Disclosure of Financial Condition to Other Members
Any member of the Association who is a party to an open transaction or who has another member's cash or securities on deposit shall furnish, upon written request of the other member, a statement of its financial condition as disclosed in its most recently prepared balance sheet.

Rule 3130 - Regulations of Members Experiencing Difficulties
A member, when so directed by the FINRA, must not expand its business during any period in which any of the following conditions have existed for more than 15 consecutive business days:

  • A firm's net capital is less than 150% of its net capital minimum requirement or such greater percentage thereof as may from time to time be prescribed by FINRA. It should be noted that the FINRA was previously known as the NASD.

  • If subject to the aggregate indebtedness requirement under SEC Rule 15c3-1, a firm's aggregate indebtedness is more than 1,000% of its net capital

  • If, in lieu of paragraph (c)(1)(B) above, the specified percentage of the aggregate debit items in the Formula for Determination of Reserve Requirements for Brokers and Dealers under SEC Rule 15c3-3 (the alternative net capital requirement) is applicable, a firm's net capital is less than 5% of its aggregate debit items

  • The deduction of capital withdrawals, including maturities of subordinated debt, scheduled during the next six months would result in any one of the conditions described above

  • The FINRA restricts the member for any other financial or operational reason

Rule 3140 - Approval of Change in Exempt Status
A member operating pursuant to any exemptive provision under Rule 15c3-3 shall not change its method of doing business in a manner that will change its exemptive status to a fully computing firm that is subject to all provisions of Rule 15c3-3; or commence operations that will disqualify it for continued exemption under Rule 15c3-3 without first having obtained the prior written approval of the Association.

Anti Money Laundering Regulations
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