ACI’s Net Capital Computation function is to prepare accurate financial statements for our clients. These statements are used to compute net capital, taking into consideration non-allowable assets, haircuts, undue concentration, blockage, subordination agreements, and any other variables that may impact the net capital of the broker dealer.
Net capital can be best defined as a computation of a broker dealer’s liquidity, or the ability to convert current assets and liabilities into net cash in the event of a liquidation. Compliance with the net capital rule is the single most important aspect of a broker dealer meeting its financial regulatory obligations. Depending on the type of business a firm is approved to conduct, each broker dealer must maintain a minimum amount of net capital at all times. Failure to maintain this minimum requirement is a violation of the net capital rule, and requires the broker dealer to cease all securities transactions until net capital compliance is restored.
Net capital is computed no less frequently than monthly, and for firms who are not able to demonstrate intra-month net capital compliance, these calculations are prepared more frequently so ACI can provide proactive guidance on the need for potential capital contributions.
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