How do l know what type of broker dealers file Focus 1 and 2 and what ...

All broker dealers are required to report their financial status to the SEC and to FINRA. Firms file the report of their financial status on a Financial Operational Combined Uniform Single Report, more commonly referred to as a FOCUS report. It sometimes helps students better understand the concept if they think of how and when individuals file tax returns. A young person just out of school who does not have a lot of deductions or writeoffs will file a simple tax return on form 1040 EZ. An older, more established person whose income and deductions are more complex will file a long form 1040 to file his / her tax return. It is similar to the way firms file FOCUS reports. Introducing broker dealers who do not have custody of customer assets have a much less complex business than a general securities broker dealer. As a result, the introducing or correspondent broker dealer will file FOCUS 2A quarterly. The general securities broker dealer is required to file more frequently and to submit more detailed financial information. . Here is a breakdown of when the FOCUS reports are filed.

• FOCUS Part I is a summary of key financial ratios and numbers that is filed monthly within 10 business days after the end of the month by broker dealers that carry customer accounts.
• FOCUS Part II is a balance sheet, income statement, and net capital computation that is filed quarterly. Broker dealers that clear or carry customer accounts must file Part II within 17 business days from the end of each calendar quarter.
• FOCUS Part II-A is a less comprehensive version than Part II that is filed quarterly. Broker dealers that do not carry or clear customer accounts must only file FOCUS Part II-A within 17 business days after the end of each calendar quarter.