FOCUS and Out

This two-day program is a must for anyone works with the FOCUS report or participates in its development. FOCUS (Financial and Operation Combined Uniform Single) is one of the major reports filed with the regulators by Broker Dealers. It is a culmination of activity which emanates from several sources ranging from proprietary trading, through customer and street side accounting through settlement to the firm's financial and regulatory reporting.

19-Mar-2012 -- 20-Mar-2012New YorkUSD$2475
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ David Weiss; ] Mon Tue Level: Basic

CPE CREDITS
14.0
From Brokerage: accountants, auditors, controllers, financing and cashiering staff. From Regulation: Federal and SRO personnel. From Public Accounting: those responsible for oversight of broker dealers.
No advance preparation required.
Students will be able to:
  • Understand the component parts of Focus II and IIA
  • Comprehend the origination of data feeding into the report
  • Appreciate the operational processes behind many of the entries
  • Observe the controls utilized to adhere to the requirements
  • Learn the computations required for regulatory reports preceding FOCUS
  • Be familiarized with those portions of the 1934 Securities and Exchange Act that formulate FOCUS
Day 1
Overview of FOCUS II
  • What is FOCUS
  • When and why did it come into being
  • What are its component parts
  • Comparison of Cash Accounting vs. Brokerage Accounting
  • What is the difference between general ledge and stock record
  • Control of the range of accounts
  • Formulation of balance sheet and the profit and loss statement
  • What is included in Net Capital Rule 15c3-1 of the 1934 Act
  • What is the difference between standard and alternate method of computing net capital
  • How is the Reserve Requirement of Rule 15c3-3 of the 1934 Act determined
  • What is Seg and what is possession and control under Rule 15c3-3
  • What are the component areas of a broker dealer that contribute to the line items of the FOCUS report

Source of Data

  • Product issuance
  • Trading markets liquidity, agency/principal
  • Proprietary/client position restrictions
  • Trade processing = non clearing vs. clearing
  • Workings of matching facilities fails
  • Workings of clearning corporations
  • Settlement. Receive and deliver
  • Open trades vs. fails
  • Workings of the depositaries
  • Workings of custodial banks
  • Workings of clearing banks
  • Role of the Fed
  • ACH vs. Fed Funds
  • Regulations covering equity and option margin
  • Computation of Seg.
  • Good locations for Seg
  • Methods of financing: customer/firm needs
  • Asset servicing/issuer actions
  • Banking services and participation
  • Stock record

Day 2
Line by Line Review of FOCUS II
  • Statement of Financial Condition
  • -Assets
  • -Liabilities
  • -Net Capital 15c3-1
  • -Part A Computation of Basic Net Capital Requirement
  • -Part B Computation of Alternate Net Capital
  • -Part C other ratios
  • -Ownership Equity
  • Statement of Income (Loss)
  • Computation to determine Reserve Requirement under 15c3-1
  • Schedule of segregation requirements and funds in segregation
  • Ownership equity and subordinated liabilities maturing or proposed to be withdrawn within the next six months and accruals, which have not been deducted in the computation of net capital
  • Recap - Ownership equity and subordinated liabilities maturing or proposed to be withdrawn within the next six months and accruals, which have not been deducated in the computation of net capital
  • Statement of changes in ownership equity (sole proprietorship, partnership or corporation)
  • Statement of changes in liabilities subordinated claims of general creditors
  • Financial and operational data

Class exercise

  • Set up of a small Broker Dealer
  • -Regulatory capital
  • -Cash, margin accounting with assorted problems
  • Computation of Seg
  • Proprietary trading - haircuts
  • Non clearing - clearing
  • Seg locations. Good or bad
  • Corporate actions with claims
  • Stock record with breaks
  • General ledger with differences
  • Prepare mine customer protection calculation
  • Prepare mini net capital
  • Prepare Focus

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.