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FINOP & Accounting Services for Broker-Dealer



NASD (FINRA) Rule 1022 requires each member firm (broker-dealer) to designate a qualified financial and operational principal (FINOP). Depending upon a member’s net capital requirement, the FINOP will be registered pursuant to either Rule 1022(b) (Limited Principal – Financial and

Operations) or Rule 1022(c) (Limited Principal – Introducing Broker/Dealer Financial and Operations). The FINOP plays an important role in ensuring investor protection by being responsible for the firm’s compliance with applicable net capital, recordkeeping and other financial and operational rules. Many smaller broker-dealers or those with limited business cannot generally afford to hire a full-time licensed FinOp, so they look to what regulators refer to as an outsourced or part-time, off-site registered FinOp. FINRA understands the financial burden it may place on financial services firms to employ a full-time licensed FinOp and has subsequently permitted small broker dealers to outsource this function to qualified third party candidates.

Outsourced FINOP Services


SAPIENT CPA provides outsourcing of FINOP services to broker-dealers with financial expertise and industry knowledge at affordable rates. We are CPAs with the licensing and experience to satisfy the FINOP requirements. Our goal is to maintain a strong accounting infrastructure for our clients so they are successful in their efforts to increase transparency, mitigate risk, fulfill regulatory obligations and build investor trust.


SAPIENT CPA Outsourced Services Include:

FINOP Services Perform under Rule 1022:


  • Final approval and responsibility for the accuracy of financial reports

  • Supervision of individuals who assist in the preparation of such reports

  • Supervision of and responsibility for individuals who are involved in the actual maintenance of the member’s books and records from which such reports are derived

  • Supervision and/or performance of the Firm’s responsibilities under all financial responsibility rules promulgated pursuant to the provisions of the Act

  • Overall supervision of and responsibility for the individuals who are involved in the administration and maintenance of the Firm’s back office operations

  • Responsibility for monitoring all reporting thresholds in accordance with SEC Rule 17a-11 to ensure that notification is not required in accordance with the rule

  • Responsible for computing the firm’s monthly computation of net capital and submission of the FOCUS Report. This will include all items related to such computation, including (but not limited to) haircut calculations and/or undue concentration.

  • On-site Visits each calendar year to review the Firm's books and records and inquire about and review the following:

1. Contracts entered into by the Firm

2. Contracts entered into by an affiliate or parent of the Firm that may impact the Firm

3. Any ongoing liabilities that may impact the Firm’s balance sheet, including for example settlements and/or arbitration awards

4. Any contingent liabilities that may impact the Firm’s aggregate indebtedness calculation

5. The nature and timing of capital contributions and capital withdrawals

6. The proper treatment/handling of Expense Sharing Agreements

7. A Firm’s activities to ensure that the proper net capital requirement, based on those activities, is being reported accurately on the Firm’s financial reports


FINOP Responsibilities include but are not limited to the following:


  • Register and license with the Firm as Financial and Operations Principal (Series 27)

  • Ensure that books adhere to FINRA Rule 17a-5

  • Computation and/or review of monthly net capital compliance

  • Prepare/Filing of FOCUS Reports (monthly and/or quarterly)

  • Form SSOI (Supplemental Statement of Other Income) filing

  • Annual Schedule I and Form Custody with Designated Examining Authorities filing

  • SIPC 6 & 7 Filings

  • File annual audit via CRD Gateway

  • Interface with regulators as necessary

  • Enhance written supervisory procedures related to the financial responsibility rules

  • Interface with regulators before and after FINRA membership as necessary

  • Full participation in your initial audit as a new member, financial audit and annual tax return preparation

  • Attend Pre-Membership Interview answer all financial related queries from FINRA

  • Renewing the Fidelity Bond, Expense Sharing Agreements, and AML Review and Testing


Accounting Services/Auidt Support:


  • Design and implement accounting system

  • Preparation and/or review of monthly financial statements

  • General Ledger account maintenace, Trial Balance, Statement of Income, Statement of Financial Condition, prepare journal entries, prepare reconciliation, monthly discussion with management to review FOCUS and Net Capital

  • Review monthly financials and propose necessary accounting adjustments

  • Preparation of Financial Statements, Notes and Supplemental Schedules for Audit

  • Liaison with independent audit firm

  • Filing your Independent Audit Report with Regulators

  • Participation in the firm annual audit as necessary

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