Small Broker-Dealers Get More Time for Annual Filings

Thoughtware Alert Published: Feb 16, 2021
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Currently, SEC-registered broker-dealers are generally required to file their annual financial report and related compliance report or exemption report and independent public accountant’s reports within 60 calendar days after fiscal year-end. The Financial Industry Regulatory Authority, Inc. (FINRA), the broker-dealer self-regulatory organization, requested a 30-day, calendar-day extension of the filing deadline for annual reports for certain smaller broker-dealers. FINRA cited the compressed period when audit services are in greatest demand and the availability of independent public accountants may be limited, manual processes for some broker-dealers to prepare audit documentation, and a reduction in the number of PCAOB-registered audit firms. FINRA believes the additional time could promote better quality of the audit reports.

On February 12, 2021, the SEC issued an order that would extend the annual report filing deadline for certain smaller broker-dealers by 30 days. To qualify for the extension, a broker-dealer must meet all the following criteria:

  • As of its most recent fiscal year-end:
    • Was in compliance with Rule 15c3-1 
    • Had total capital and allowable subordinated liabilities of less than $50 million, as reported in box 3530 of Part II or Part IIA of its FOCUS Report
  • Is permitted to file an exemption report as part of its most recent fiscal year-end annual reports
  • Submits written notification to its designated examining authority of its intent to rely on this order on an ongoing basis for as long as it meets the order’s conditions 
  • Electronically files an annual report with the SEC

The SEC estimates that approximately 3,000 of the 3,620 registered broker-dealers would meet these conditions. 


 If you have questions about these changes, contact your BKD Trusted Advisor™ today.

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