SEC Proposes Amendments to Broker-Dealer Financial Reporting Rule

June 2011
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SEC Proposes Amendments to Broker-Dealer Financial Reporting Rule

At a glance

June 2011 - Amendments call for broker-dealers' assertion of compliance with the Financial Responsibility Rules, new reviews by independent auditors, and additional regulatory reporting requirements related to custody.

Amendments call for broker-dealers’ assertion of compliance with the Financial Responsibility Rules, new reviews by independent auditors, and additional regulatory reporting requirements related to custody.

On June 15, 2011, the Securities and Exchange Commission (“SEC”) proposed significant changes to the broker-dealer financial reporting rule, Rule 17a-5 under the Securities Exchange Act of 1934 (“Exchange Act”). Growing out of the Madoff fraud and other Ponzi schemes, the proposed changes are intended to improve safeguards over customer assets, strengthen audits of broker-dealers, and improve the SEC’s oversight of the way broker-dealers handle their customers’ securities and cash. This Regulatory Brief summarizes the SEC’s rule proposal and its impact on broker-dealer firms.

Contact PwC's Paul Lameo, Linda McGowan or David Sapin for more information.