A recent amendment to SEA Rule 17a-5(f)(2) now makes it necessary for broker-dealers to file a statement with the SEC, FINRA or any other designated examination authority regarding its independent public accountant by December 10 of every year or within 30 calendar days after the effective date of its registration as a broker or dealer, if earlier. The independent public accountant must be registered with the Public Company Accounting Oversight Board.
Annual filings by the December 10 deadline are only necessary if the engagement is for a single year, or if the most recent engagement has been terminated or amended. However, if that agreement is of a continuing nature, and that fact is stated in the filing, the broker-dealer only needs to file the statement pursuant to Rule 17a-5(f)(2) once, until terminated or amended.
Broker-dealers looking to file a statement that the engagement of an independent public accountant is of a continuing nature should make sure the engagement letter has wording that describes that successive annual audits will be performed until services are terminated. A new engagement letter may still be issued every year to address potential changes to the organization’s operations.
For more details, please view the FINRA Regulatory Notice 14-39 which discusses this topic further and also includes a sample statement to be filed with the SEC and FINRA.