Regulatory and Financial Reporting
VirtusaPolaris provides financial data mapping services from Broadridge to downstream platforms to deliver seamless execution of regulatory, risk, and financial reporting.
Regulatory reporting includes SEC 15c3-1, 15c3-3, 17a-3, 17a-4, 17a-5, 17a-11, 17a-13, and other relevant reports.
All regulatory reports are contingent on accurate data. Broadridge is the source for some of that data. VirtusaPolaris has the ability to assist clients in assuring that the data flows correctly from Broadridge to the applicable downstream applications to assure compliance with pertinent regulations.
SEC financial responsibility requirements:
- SEC 15c3-1 is the principal rule by which the financial health of US broker-dealers is regulated and monitored. The net capital rule requires US broker-dealers to maintain “net capital” (i.e., capital in excess of liabilities) in specified amounts that are determined by the types of business conducted by the broker-dealer. The net capital rule is designed to ensure the ready availability of funds and securities to customers, and that a broker-dealer that is forced to liquidate will have sufficient assets to be able to return funds and securities promptly to creditors and customers.
- SEC 15c3-3 is the customer protection rule, which is intended to protect customers’ funds held by their broker-dealers and prohibit broker-dealers from using customer funds and securities to finance any part of their business that is unrelated to servicing securities customers. The rule requires a broker-dealer that maintains custody of customer securities and cash to comply with two primary requirements.
- SEC 17a-3 & 17a-4 rules require broker-dealers to make and maintain certain business records to assist the firm in accounting for its activities, and assist securities regulators in compliance examinations.
- SEC 17a-11 is the notification rule, which requires broker-dealers to give notice to the SEC when certain events occur, such as the firm’s net capital falling below its required minimum.
SEC custody-related requirements:
- SEC 17a-5 requires broker-dealers to file schedules, including computations of net capital, customer reserve requirement, and information concerning possession and control of customer securities.
- SEC 17a-13 is the quarterly security count rule, which requires broker-dealers on a quarterly basis to count, examine, and verify the securities it physically holds (or otherwise controls) and compare those results against their records. If there are unreconciled items, the broker-dealer must take capital charges.
- Account Statement Rules require broker-dealers to send, at least quarterly, an account statement to each customer reflecting that customer’s securities positions, cash balances, and account activity during the period.
The FED reporting requirements
- FED FR Y-14A report annually collects large bank holding companies' (BHCs) quantitative projections of balance sheet, income, losses, and capital across a range of macroeconomic scenarios and qualitative information on methodologies used to develop internal projections of capital across scenarios. The BHCs are required to complete the following FR Y-14A schedules: the Summary, Scenario, Counterparty Credit Risk (CCR), Basel III/Dodd-Frank, Regulatory Capital Instruments, and Operational Risk. The number of schedules each BHC completes is subject to materiality thresholds and certain other criteria.
- FED FR Y-9C report collects basic financial data from a domestic bank holding company (BHC), a savings and loan holding company (SLHC), and a securities holding company (SHC) on a consolidated basis in the form of a balance sheet, an income statement, and detailed supporting schedules, including a schedule of off balance-sheet items