On April 5, the Financial Industry Regulatory Authority released Regulatory Notice 16-11 stating that the Securities and Exchange Commission had approved its proposal to expand the derivatives and other off-balance sheet (OBS) items schedule filing requirement to certain non-carrying and non-clearing firms that have significant amounts of OBS obligations. Historically, the OBS was required to be filed by FINRA member firms that self-clear proprietary transactions, clear transactions for others or carry customer accounts. FINRA’s proposal expands the filing requirement to FINRA member firms that have, pursuant to Rule 15c3-1 under the Securities Exchange Act of 1934, a minimum dollar net capital requirement equal to or greater than $100,000 and at least $10 million in reportable items pursuant to the OBS. There is a de minimis exception to the filing requirement for firms whose aggregate gross amount of OBS items is less than 10 percent of the firm’s excess net capital on the last day of the reporting period. Firms who seek to take advantage of the de minimis exception must affirmatively indicate so in the eFOCUS system.
Newly reporting firms must file their initial OBS on or before August 2. Firms with reporting obligations prior to the recent expansion should continue to file without interruption.
FINRA Regulatory Notice 16-11 is available here.