Accounting Guide - Brokers and Dealers in Securities 2018

An industry-specific accounting guide for brokers and dealers

The Accounting Guide: Brokers and Dealers in Securities 2018 is provided by the American Institute of Certified Public Accountants. It details specialized accounting and regulatory requirements for the broker-dealer industry. Detailed chapters provide comprehensive examinations of timely subjects. For example, the chapter on the securities industry covers discount brokers, investment bankers, government securities dealers, clearing brokers, and other professions. Additional chapters cover: regulatory consideration, internal control, accounting standards, and financial statement considerations. Broker-dealers gain guidance in financial statement preparation while following the best practices and accounting principles outlined.

List of contents

Chapter 1 The Securities Industry 01-142

Broker-Dealers 04-25

Discount Brokers 08

Investment Bankers 09-14

Government Securities Dealers 15

Designated Market Maker 16

Clearing Brokers 17

Carrying Brokers 18

Prime Brokers 19

Swap Dealers 20-21

Introducing Brokers 22

Brokers' Brokers 23

Bank-Owned Brokers (Section 4k4(e) and Section 20 Brokers) 24

Independent Broker-Dealers 25

The Financial Markets 26-46

Exchange Market 29-34

OTC Market 35-39

Third Market 40

Alternative Trading Venues 41-46

Clearing Organizations and Depositories 47-53

Transfer Agents 54-57

Regulatory Overview 58-61

Business Activities 62-142

Brokerage 62-70

Firm Trading 71-107

Investment Banking 108-115

Financing 116-128

Other Activities 129-142

Chapter 2 Broker-Dealer Functions, Books, and Records 01-176

Introduction 01-18

Overview 01-03

Original Entry Journals 04-06

General Ledger 07

Stock Record 08-12

Regulatory Recordkeeping Requirements 13-15

Trade Date and Settlement Date 16-18

Trade Execution 19-60

Customer Trades 19-48

Proprietary Trades 49-60

Clearance and Settlement 61-90

Overview 61-65

Comparison 66-70

Settlement 71-87

Bookkeeping 88-90

Specialized Clearance Activities 91-118

Mortgage-Backed Securities 91-95

Government Securities 96-98

Repos and Reverse Repos 99-100

Derivative Securities 101-103

Commodity Futures and Options on Futures 104-108

Forward Transactions 109

Municipal Securities 110-111

International Securities 112

Options on Securities 113-118

Reconciliation and Balancing 119-122

Custody 123-134

Possession or Control 124-128

Securities Transfer 129-134

Dividends, Interest, and Reorganization 135-148

Dividends and Interest 135-143

Reorganization 144-148

Collateralized Financing 149-163

Stock Loan and Stock Borrow 149-153

Bank Loan Financing 154-157

Reverse Repos and Repos 158-163

Regulatory Considerations 164-171

Tax Information Reporting for Certain Customer Transactions 172-175

Illustrative Stock Record Entries 176

Chapter 3 Regulatory Considerations 01-188

Applicable Rules 05-10

Interpretations of Rules 09-10

Explanation of Significant SEC Financial Responsibility Rules 11-125

SEC Rule 15c3-3, "Customer Protection--Reserves and Custody of Securities" 11-40

SEC Rule 15c3-1, "Net Capital Requirements for Brokers or Dealers" 41-60

SEC Rule 15c3-1(e), "Notice Provisions Relating to the Limitations on the Withdrawal of Equity Capital" 61-65

SEC Rule 17a-13, "Quarterly Security Counts to Be Made by Certain Exchange Members, Brokers, and Dealers" 66-70

SEC Rule 17a-3, "Records to Be Made by Certain Exchange Members, Brokers, and Dealers" 71

SEC Rule 17a-4, "Records to Be Preserved by Certain Exchange Members, Brokers, and Dealers" 72

Regulation T and Maintenance Margin 73-79

Account Statement Rule(s) 80-81

SEC Rules and CFTC Regulations Governing Customer Margin for Transactions in Security Futures 82

SEC Rules 17h-1T and 17h-2T 83-86

SEC Rule 17Ad-17, "Lost Securityholders and Unresponsive Payees" 87-92

SEC Rule 17Ad-22, "Clearing Agency Standards" 93-94

SEC Rule 17-248--Subpart C, "Regulation S-ID: Identity Theft Red Flags" 95

SEC Rule 506 of Regulation D and SEC Rule 144A 96-97

SEC Rule 15c3-5, "Risk Management Controls for Brokers or Dealers with Market Access" 98-101

SEC Rule 17a-5, "Reports to Be Made by Certain Brokers and Dealers" 102-122

Anti-money Laundering Regulations 123-125

Reporting Requirements 126-151

Consolidation of Subsidiaries 132-134

Form Custody 135

Other Periodic Reporting 136

The Annual Audited Financial Report 137-151

Filings Concurrent With the Annual Audited Financial Report 152-161

Compliance or Exemption Report Required by SEC Rule 17a-5 152-154

Report to State Regulatory Agencies 155

Financial Statements to Be Furnished to Custo

About the author

Founded in 1887, the American Institute of Certified Public Accountants (AICPA) represents the CPA and accounting profession nationally and globally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the accounting profession's technical and ethical standards.
The AICPA's founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.

Summary

An industry-specific accounting guide for brokers and dealers

The Accounting Guide: Brokers and Dealers in Securities 2018 is provided by the American Institute of Certified Public Accountants. It details specialized accounting and regulatory requirements for the broker-dealer industry. Detailed chapters provide comprehensive examinations of timely subjects. For example, the chapter on the securities industry covers discount brokers, investment bankers, government securities dealers, clearing brokers, and other professions. Additional chapters cover: regulatory consideration, internal control, accounting standards, and financial statement considerations. Broker-dealers gain guidance in financial statement preparation while following the best practices and accounting principles outlined.

Product details

• Authors: AICPA
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Paperback / Softback
• Released: 31.01.2019
• EAN: 9781945498992
• ISBN: 978-1-945498-99-2
• No. of pages: 464
• Series: AICPA; AICPA
• Subject: Social sciences, law, business > Business > Business administration