Rule 440. Books and Records
This rule is no longer applicable.
Every member not associated with a member organization and every member organization shall make and preserve books and records as the Exchange may prescribe and as prescribed by Rule 17a-3. The recordkeeping format, medium and retention period shall comply with Rule 17a-4 under the Securities Exchange Act of 1934.
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Amendments. June 17, 1976. December 31, 1997. Amended by SR-FINRA-2010-052 eff. Dec. 5, 2011. Selected Notice: 11-19. |
• • • Supplementary Material: --------------
.10 Periodic Security Counts, Verifications, Comparisons, etc
Each member and member organization shall make the counts, examinations, verifications, accountings, comparisons and entries prescribed by Regulation 240.17a-13 of the Securities and Exchange Commission unless the member or member organization is specifically exempted under such Regulation or is otherwise exempted by the Securities and Exchange Commission as provided in such Regulation. More frequent counts, verifications, comparisons, etc. should be made where prudent business practice would so require. Each member and member organization subject to the above requirements shall also:
Each member and member organization shall make the counts, examinations, verifications, accountings, comparisons and entries prescribed by Regulation 240.17a-13 of the Securities and Exchange Commission unless the member or member organization is specifically exempted under such Regulation or is otherwise exempted by the Securities and Exchange Commission as provided in such Regulation. More frequent counts, verifications, comparisons, etc. should be made where prudent business practice would so require. Each member and member organization subject to the above requirements shall also:
(1) Receive position statements as frequently as good business practice requires, but no less than once per month with respect to securities held by clearing corporations, The Depository Trust Company, other organizations, or correspondents. Each such member or member organization shall at least once per month reconcile all such securities and money balances by comparison of the clearing corporations' or correspondents' position statements to the member or member organization's books and records and promptly report differences to the contra organization and such differences shall be promptly resolved by both. Where statements are sent more than once a month or where there is a higher volume, good business practice may require a more frequent exchange of statements and their reconciliation.
(2) At a minimum of once per month account for all U.S. Government bearer instruments by physical examination and comparison with its books and records. More frequent counts should be made where prudent business practice would otherwise require. The counts should be made by persons other than those who are normally responsible for processing government securities.
(3) At a maximum of seven business days after such security count, enter all unresolved difference into a difference account, for that count. The differences account shall identify the unverified securities and reflect the number of shares or principal amount long or the number of shares or principal amount short of each security difference and the date of the security count which disclosed the difference. Thereafter any adjustment of a difference position will be made by entry into such account. Differences remaining after adjustments or entries reflecting subsequent security counts shall always reflect the date of the original or earliest remaining difference. Unresolved security difference position valuations shall be made at least once a month as of the date of the computation of Net Capital and retained in the member or member organization's files for at least three years.
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Amendments. Adopted November 19, 1970. November 7, 1974. June 17, 1976. Amended by SR-FINRA-2010-061 eff. Aug. 1, 2011. Selected Notice: 11-26. |
.20 Identification of Suspense Accounts and Assignment of Responsibility for General Ledger Accounts
All receipts and payments of money and all receipts and deliveries of securities shall be recorded promptly on each member organization's books of account. Any account used temporarily to record money charges or credits and/or receipts or deliveries of securities pending determination of their ultimate disposition shall be clearly identified as a suspense account, and a record maintained of all information known with respect to each item so recorded. Such suspense accounts include, but are not limited to, DK fails, unidentified fails, unallocable securities receipts vs payment, returned deliveries, and any other receivable or payable (both money and/or securities) "suspended" because of doubtful ownership, collectibility or deliverability. To the extent that suspense items can be distinguished by type, separate accounts may be used provided that the word "suspense" is made a prominent part of the account title.
A qualified employee shall be assigned responsibility for each general ledger bookkeeping account and account of like function used by a member organization and such employee shall control and oversee entries into each such account and shall determine at all times that the account is current and accurate. A competent supervisory employee shall, as frequently as is necessary considering the function of the account but, in any event, at least monthly, review each account to determine that it is current and accurate and that any items which become aged and/or uncertain as to resolution are promptly identified for research and possible transfer to suspense accounts. A written record shall be kept of the names of the employees assigned such primary and supervisory responsibility for each such account.
All receipts and payments of money and all receipts and deliveries of securities shall be recorded promptly on each member organization's books of account. Any account used temporarily to record money charges or credits and/or receipts or deliveries of securities pending determination of their ultimate disposition shall be clearly identified as a suspense account, and a record maintained of all information known with respect to each item so recorded. Such suspense accounts include, but are not limited to, DK fails, unidentified fails, unallocable securities receipts vs payment, returned deliveries, and any other receivable or payable (both money and/or securities) "suspended" because of doubtful ownership, collectibility or deliverability. To the extent that suspense items can be distinguished by type, separate accounts may be used provided that the word "suspense" is made a prominent part of the account title.
A qualified employee shall be assigned responsibility for each general ledger bookkeeping account and account of like function used by a member organization and such employee shall control and oversee entries into each such account and shall determine at all times that the account is current and accurate. A competent supervisory employee shall, as frequently as is necessary considering the function of the account but, in any event, at least monthly, review each account to determine that it is current and accurate and that any items which become aged and/or uncertain as to resolution are promptly identified for research and possible transfer to suspense accounts. A written record shall be kept of the names of the employees assigned such primary and supervisory responsibility for each such account.
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Adopted. November 19, 1970. Amendments. August 2, 1971. June 17, 1976. Amended by SR-FINRA-2010-061 eff. Aug. 1, 2011. Selected Notice: 11-26. |