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S27 FINRA
Drills
| Question | Answer |
|---|---|
| Basic net capital formula | Net worth minus non allowable assets minus haircuts |
| Non allowable assets include | Fixed assets and receivables over 30 days |
| Receivables over 30 days treatment | 100 percent deduction from net worth |
| Aggregate indebtedness definition | Total unsecured liabilities |
| Maximum AI to net capital ratio | 15 to 1 under basic method |
| Early warning AI trigger | 12 to 1 |
| Early warning net capital trigger | Below 120 percent of minimum requirement |
| Common stock haircut | 15 percent of market value |
| Preferred stock haircut | 15 percent of market value |
| US Treasury under 1 year haircut | 0 percent |
| Municipal bond haircut range | 2 to 7 percent depending on maturity |
| OTC option haircut | 100 percent of market value |
| Fail to deliver haircut trigger | After 5 business days |
| Effect when fail resolved | Net capital increases |
| Undue concentration trigger | Position exceeds 10 percent of tentative net capital |
| Undue concentration exclusion | Greater of 500 shares market value or 10000 dollars |
| Concentration haircut percentage | Apply normal haircut to adjusted excess |
| Secured demand note ownership | Lender retains ownership and dividends |
| Secured demand note liquidation right | Broker dealer may liquidate if collateral insufficient |
| Revolving subordination capital charge | Full loan commitment amount |
| Subordinated loan minimum term | 1 year minimum |
| K2i exemption minimum capital | 100000 dollars |
| K2ii exemption minimum capital | 50000 dollars |
| Clearing firm minimum capital | 250000 dollars |
| Dealer trading for own account minimum capital | 100000 dollars |
| Prime broker minimum capital | 1500000 dollars |
| Executing broker prime arrangement minimum capital | 1000000 dollars |
| Credit balances in noncustomer short accounts | Included in aggregate indebtedness |
| Reserve bank account transfer effect on net capital | No effect asset to asset movement |
| Dividends and interest posting deadline | Within 2 business days |
| ACATS validation deadline | 1 business day |
| ACATS completion deadline | 3 business days after validation |
| FOCUS filing deadline | 17 business days after month or quarter end |
| Net capital deficiency notice timing | Immediate notice to DEA plus written notice within 24 hours |
| Reserve deficiency deposit timing | Within 1 business day |
| Variable annuity principal approval timing | Within 7 business days |
| Arbitration eligibility time limit | 6 years from occurrence or event |
| Customer complaint retention at branch | 2 years at office of supervision |
| Total complaint record retention | 4 years total |
| Blotter retention period | 3 years |
| Fails to receive or deliver retention | 3 years |
| Assets and liabilities retention | 6 years |
| Closed customer account records retention | 4 years after account closure |
| Articles of incorporation retention | Life of firm plus 3 years |
| CTR reporting threshold | Over 10000 dollars cash in one business day aggregated |
| SIPC total protection limit | 500000 dollars total per customer |
| SIPC cash sublimit | 250000 dollars maximum cash |
| Monthly reserve computation allowed when | AI not over 8 to 1 and free credits not over 1000000 |
| Alternate net capital method requirement | Greater of 250000 dollars or 2 percent of aggregate debit items |
| Early warning net capital trigger | Below 120 percent of minimum requirement |
| Fail to deliver haircut trigger | After 5 business days |
Created by:
sjameve
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