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| | V. Recordkeeping Requirements |
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Capital Adequacy Standards for Securities Firms
V. Recordkeeping Requirements
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The areas of recordkeeping and reporting requirements raise the issues of accounting principles and practices as well as auditing standards. In that connection, the Technical Committee notes that some countries use trade date accounting, some use settlement date accounting, and others use a mixture of these approaches. Although trade date accounting more accurately reflects risk, one possible resolution would be to permit securities firms to account on a trade date or settlement date basis unless there is a material difference, in which event the firm must use trade date accounting. The Technical Committee will need to consider these issues.
Rules designed to establish capital adequacy standards are effective only to the extent that the securities firms records are adequate accurate, and current. Recordkeeping requirements should be designed to ensure that standardised categories of information are maintained by securities firms in their business records in a readily accessible format. This facilitates examination by supervisory authorities to assure that the securities firms are conducting their activities in compliance with the regulations and through which unlawful activities are detected.
Some of the records that should be required are records reflecting: - all purchases and sales of securities;
- customer and firm account information;
- all receipts and disbursements of cash and other debits and credits;
- all receipts and deliveries of securities;
- all assets, liabilities, income, expenses, and capital accounts;
- Location and ownership of customer and firm securities; and
- trial balances and net capital computations.
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Capital Adequacy Standards for Securities Firms
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