Daily Customer and Broker-Dealer Proprietary Account (PAB) Reserve Computations

Summary

FINRA is issuing this Notice to remind carrying members of the SEC’s compliance date for the required daily customer and PAB reserve computations, which will apply to members with average total credits equal to or greater than $500 million. This Notice also highlights guidance provided by the SEC Division of Trading and Markets staff (Division staff) regarding the reserve deposit adjustment related to sweep program credits and provides information on how carrying members may report such adjustments. In addition, consistent with Division staff guidance, the Notice provides dates on which the daily customer and PAB reserve computation is not required in calendar years 2026 and 2027.

Questions concerning this Notice should be directed to:

• Ann Duguid, Senior Director, Office of Financial & Operational Risk Policy (OFORP), at (646) 315-7260 or by email; or
• Kathryn Mahoney, Senior Director, OFORP, at (646) 315-8428 or by email.

Questions may also be directed to your firm’s Risk Monitoring Analyst.

Background

Compliance Date

The SEC amended SEA Rule 15c3-3¹ to require certain carrying broker-dealers to increase the frequency with which they perform computations of the net cash they owe to customers (“customer reserve computation”) and PAB account holders (“PAB reserve computation”) from weekly to daily. The daily computation requirements apply to carrying members having reported average total credits equal to or greater than $500 million in their 12 most recently filed month-end FOCUS reports.² The SEC has stated that members that meet this threshold must perform customer and PAB computations daily beginning no later than June 30, 2026 (i.e., firms must use the information as of the close of business on June 30, 2026, to perform their computations on July 1, 2026).³

Sweep Program Cash and the Customer Reserve Computation

The Division staff has provided guidance to broker-dealers that compute a daily customer reserve formula and offer their customers a sweep program⁴ (FAQ #5):⁵

Question 5: Can a carrying broker-dealer reduce a required deposit (i.e., excess of total credits over total debits) to its customer reserve bank account(s) by the amount of credits included in such customer reserve computation which are transferred, on the business day following the “as of” date of the computation, to a Sweep Program under paragraph (j)(2)(ii) of Rule 15c3-3 (hereinafter “sweep credits”)?

Answer: Staff would not object if a carrying broker-dealer reduces a required deposit to its customer reserve bank account(s) by the amount of sweep credits included in such customer reserve computation which are transferred, on the business day following the “as of” date of the computation, to a Sweep Program under paragraph (j)(2)(ii) of Rule 15c3-3.  A carrying broker-dealer may not consider any sweep credits in determining whether it may make a withdrawal from its customer reserve bank account(s) under paragraph (g) of Rule 15c3-3.

The FOCUS report does not currently include a line item for a member to report the reduction in a required reserve account deposit resulting from sweep credits, as permitted by FAQ #5. To report this information, carrying members may use a new data field developed by FINRA (Line Item 4495) and submit the information to FINRA through the eFOCUS user interface. This line item, illustrated in Attachment A, is designed to show how such reduction affects the total amount required to be deposited in the reserve bank account reported on the FOCUS report. FINRA notes the line item is voluntary and intended to aid members in their reporting.

Dates on Which Reserve Computations Are Not Required

The Division staff has additionally provided relief to broker-dealers from computing daily customer or PAB reserve formula computations on federal holidays and certain other specified days (collectively referred to as Non-Computation Days) (FAQ #6):⁶

Question 6: Can a carrying broker-dealer that performs a required daily customer and/or PAB reserve computation treat Federal Holidays, Good Friday, and certain other business days adjacent to holidays as non-computation days (“Additional Days”) for purposes of paragraph (e)(3) of Rule 15c3-3?

Answer: Staff would not object if a carrying broker-dealer that performs a required daily customer and/or PAB reserve computation does not perform a customer and/or PAB reserve computation on the following days: (1) a Federal Holiday; (2) Good Friday; or (3) the following Additional Days: [See following table provided by FINRA]

Non-Computation Days

(Note: FINRA provides the dates listed under the columns for 2026 and 2027 to assist members with their reporting.)

Endnotes