Securities and Exchange Commission: Broker-Dealer Reports
GAO-13-845R, Sep 5, 2013
GAO reviewed the Securities and Exchange Commission's (Commission) new rule on the broker-dealer reports. GAO found that (1) the final rule amended certain broker-dealer annual reporting, audit, and notification requirements. The amendments include a requirement that broker-dealer audits be conducted in accordance with standards of the Public Company Accounting Oversight Board (PCAOB) in light of explicit oversight authority provided to the PCAOB by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to oversee these audits. The amendments further require a broker-dealer that clears transactions or carries customer accounts to agree to allow representatives of the Commission or the broker-dealer's designated examining authority (DEA) to review the documentation associated with certain reports of the broker-dealer's independent public accountant and to allow the accountant to discuss the findings relating to the reports of the accountant with those representatives when requested in connection with a regulatory examination of the broker-dealer. Finally, the amendments require a broker-dealer to file a new form with its DEA that elicits information about the broker-dealer's practices with respect to the custody of securities and funds of customers and non-customers. The stated effective date for this final rule is June 1, 2014, except that the amendment to 240.17a-5(e)(5) is effective October 21, 2013, and the amendments to 240.17a-5(a) and (d)(6) and 249.639 are effective December 31, 2013; and (2) Commission complied with applicable requirements in promulgating the rule.