Sec Form X17a 5 Part Ii printable pdf download

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UNITED STATES

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM X-17A-5 PART II

(FOCUS Report)

GENERAL INSTRUCTIONS

This FOCUS Report (Form X-17A-5) constitutes the basic financial and operational report required of those brokers or dealers

subject to any minimum net capital requirement set forth in Rule 15c3-1. The instructions issued from time-to-time must be used

in preparing this report and are considered integral part of this report.

The report shall be filed with the regulatory organization designated as the Examining Authority for the broker or dealer. The

name of the broker or dealer and date of report shall be repeated on each sheet of the report submitted. If no response is made to

an item or subdivision on thereof it shall constitute a representation that the broker or dealer has nothing to report.

The designated Examining Authority may at any time or from time-to-time in the case of a particular broker or dealer, subject

to applicable rules or regulations, prescribe more frequent filing requirements than those prescribed herein.

Foreign currency may be expressed in terms of United States dollars at the current rate of exchange and where carried in

conjunction with the United States dollar balances for the same customer may be consolidated with United States dollar balances

and the gross or net position reported in its proper classification, provided the foreign currency is not subject to any restriction as

to conversion. If the foreign currency position so treated is substantial, some indication of its size shall be given.

Aggregate Indebtedness and Net Capital are defined terms, which must be referred to in the applicable capital requirements

rule. Accompanying the FOCUS Report are instructions relating to specific items which must be followed. Any deviations from

these specific instructions must be clearly explained in footnotes to the report.

If the broker or dealer is a sole proprietor, all securities owned and all accounts carried for it by other brokers, dealers, or others

which contain money balances and/or securities shall be reported, as appropriate.

“Exempted Securities” are those securities defined as such under the provisions of Section 3(a)(12) of the Securities Exchange

Act of 1934 other than securities designated for exemption by action of the Commission.

The term “contractual commitments” shall include underwriting, when issued, when-distributed and delayed delivery

contracts, the writing or endorsement of puts and calls and combinations thereof, commitments in foreign currencies and spot

(cash) commodity contracts, but shall not include future commodity contracts and un-cleared “regular way” purchases and sales

of securities. A series of contracts of purchase or sale of the same security conditioned, if at all, only upon issuance may be treated

as an individual commitment.

“Securities which are not readily marketable” shall be so designated. The term “securities not readily marketable” includes,

but is not limited to: (a) securities for which there is no “ready market”; (b) securities, except “exempted securities,” for which

there is no market on a securities exchange or no independent publicly quoted market; (c) securities which cannot be publicly

offered or sold unless registration has been effected under the Securities Act of 1933 (or the conditions of an exemption, such as

Regulation A, under Section 3(b) of such Act have been complied with); (d) securities which have cannot be publicly offered or

sold because of statutory, regulatory or contractual arrangement or other restrictions.

The term “ready market” shall include a recognized established securities market in which there exists independent bona-fide

offers to buy and sell so that a price reasonably related to the last sales price or current bona-fide competitive bid and offer

quotations can be determined for a particular security almost instantaneously and where payment will be received in settlement

of a sale at such price within a relatively short time conforming to trade custom.

A “ready market” shall also be deemed to exist where such securities have been accepted as collateral for a loan by a bank as

defined in Section 3(a)(6) of the Securities Exchange Act of 1934 and where the broker or dealer demonstrates to its Examining

Authority that such securities adequately secure such loans.

Indebtedness shall be deemed to be adequately collateralized or secured when the excess of the market value of the collateral

over the amount of indebtedness is sufficient to make the loan acceptable as a fully secured loan to banks regularly making secured

loans to brokers or dealers.

The term “Examining Authority” of a broker or dealer shall mean the national securities exchange or national securities

association of which the broker or dealer is a member or, if the broker or dealer is a member of more than one such self-regulatory

organization, the organization designated by the Commission as the Examining Authority for such broker or dealer, or if the broker

or dealer is not a member of any such self-regulatory organization, the Regional Office of the Commission where such broker or

dealer has its principal place of business.

Persons who are to respond to the collection of information

contained in this form are not required to respond unless the

form displays a currently valid OMB control number.

SEC1695A (02-04) 1 of 17

Sec Form X17a 5 Part Ii

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