Financial and Operational (FOCUS) Reports
The first category we’ll look at is derived from Rule 17a-5, which requires member firms to file monthly and quarterly financial reports with both the SEC and FINRA. These are known as FOCUS reports (short for Financial and Operational Combined Uniform Single reports). Think of them as if they were financial statements: they provide balance sheet, income statement, net capital, and related operational information.
FOCUS reports have their own form: Form X-17A-5. Depending on the type of firm, broker-dealers must submit Schedule I, Part I, Part II, and/or Part IIA from this form. If that sounds confusing, don’t panic: for the exam, you will not need to know the specifics of what must be included in each kind of report—only which form must be filed by which broker-dealers and by what date.
Here’s an overview. Carrying firms (also known as “clearing firms”) must file Part I within 10 business days after the end of each month. They must also file Part II within 17 business days after the end of each calendar quarter and within 17 business days after the end of the fiscal year (if that date is not the end of a quarter).
Non-carrying firms (also known as “introducing firms”) must file Part IIA within 17 business days after the end of each calendar quarter and within 17 business days after the end of the fiscal year (if that date is not the end of a quarter). They do not have to file a monthly report.
All firms must file an annual Schedule I—this is the part of the form used to describe the firm’s operational details. Schedule I must be filed within 17 business days of the last day of the calendar year (December 31).
Finally, when a firm terminates its membership in any exchange or self-regulatory organization, it must file a Part II (carrying firms) or IIA (non-carrying firms) within two business days of that termination.
SEC Rule 17a-5(a)(2)
Note: FINRA reserves the right to requ