SEC Risk Assessment Reports

The Market Reform Act of 1990 enhances the SEC’s role in monitoring the financial responsibility of large broker-dealers. It specifically authorizes the SEC to obtain operating and market information regarding the financial activities of a broker-dealer’s significant affiliates. Incorporated into the Exchange Act as Section 17(h), it requires broker-dealers to maintain and preserve risk assessment information with respect to those affiliates whose business activities are capable of significantly impacting the broker-dealer’s financial and operational integrity.

The statute requires broker-dealers to develop policies and procedures for monitoring and controlling its financial and operational risks resulting from the activities of these affiliates. In addition, broker-dealers must keep