Regulatory Bookkeeping

Accurate books and records are essential for efficient, compliant operations. ACI offers full-service regulatory bookkeeping tailored for broker-dealers, ensuring every transaction and account underpins financial reporting, net capital analysis, audits and exams.

ACI’s regulatory bookkeeping services include:

Maintenance of Regulatory Books and Records

From revenue tracking to payables management, ACI’s bookkeeping services ensure every transaction is mapped cleanly to ensure ongoing compliance with regulatory requirements. We maintain detailed receivables and payables schedules, issue checks and wires under strict internal control protocols and structure your ledger to support capital compliance and FOCUS reporting.

GAAP Financial Statement Preparation

ACI prepares unaudited financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP), designed specifically for broker-dealers. Every statement is prepared by experienced CPAs and FinOps who understand how each number correlates with your compliance obligations.

Bank & Clearing Firm Reconciliations

FINRA expects broker-dealers to reconcile their cash and securities positions with rigor. ACI performs monthly bank and clearing account reconciliations to support net capital accuracy and ensure a clean audit trail. We segregate this process from bookkeeping to strengthen internal controls and mitigate risk.

Questions on regulatory bookkeeping for broker-dealers? Here’s what you need to know.

What is regulatory bookkeeping, and how is it different from standard bookkeeping?

Regulatory bookkeeping goes beyond day-to-day recordkeeping. It ensures that every transaction is categorized and documented in a way that supports regulatory reporting, including FOCUS filings, net capital computations and annual audits. Accuracy, documentation and regulatory alignment are paramount.

What is the role of receivables and payables in broker-dealer operations?

Receivables (uncollected income) and payables (unpaid expenses) provide insight into a firm’s short-term financial obligations and cash flow. For broker-dealers, these schedules must be maintained with precision to support net capital calculations and identify timing mismatches that could affect compliance.

Why is bank reconciliation essential for broker-dealers?

Reconciling bank and clearing firm accounts ensures that internal records match external statements. Discrepancies – whether from timing differences, posting errors or fraud – must be identified and corrected promptly. This process supports net capital reporting and is required under FINRA rules.

How often should reconciliations be completed and reviewed?

Best practices suggest reconciling all bank and clearing accounts monthly, shortly after month-end. Reviews should occur within one week and be performed by someone other than the preparer. This timely, two-step process is essential for maintaining audit preparedness and regulatory compliance.

What is accrual-based accounting and why is it used by broker-dealers?

Accrual accounting recognizes revenues and expenses when they are earned or incurred – not when cash changes hands. This method is required under U.S. GAAP and ensures financial statements reflect the firm’s true financial position. It also aligns with regulatory reports like the FOCUS Report and Supplemental Statement of Income (SSOI), which require categorization of income and expenses by period.

How are GAAP financial statements used by broker-dealers?

GAAP-compliant financials – typically including a balance sheet and income statement – are foundational to regulatory filings, audit preparation and internal financial analysis. These statements are often unaudited reports prepared monthly, and are reviewed in more detail at year-end during annual audits.

What is the significance of segregation of duties in reconciliations?

Segregating duties – especially between those who process transactions and those who reconcile them – is a key control to prevent errors and misappropriation. Regulators expect this separation to be documented and consistent. For example, someone preparing a reconciliation should not also approve vendor payments.

What happens if a broker-dealer falls behind on financial reporting?

Failure to maintain timely and accurate books can result in late regulatory filings, inaccurate net capital calculations and audit deficiencies. This may lead to fines, increased regulatory oversight or trading restrictions. Strong bookkeeping and reconciliation processes are the first line of defense.