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Attention broker-dealers and their Auditors: SIPC assessment changes.

Broker-dealers registered with the Securities and Exchange Commission, with some limited exceptions, are required to be members of Securities Investor Protection Corporation. Before Apr. 1, 2009, the SIPC member assessment was a flat rate of $150 per year. Beginning on that date, SIPC reinstituted an assessment rate of one-quarter of 1% of a member's SIPC net operating revenue, which is generally defined on SIPC assessment forms as "gross revenues from the securities business." Beginning Apr. 1, 2009, Assessment Forms SIPC-6 and SIPC-7T replaced Form SIPC-4. Form SIPC-3, Certification of Exclusion From Membership, should continue to be submitted by those broker-dealers that qualify for exclusion from SIPC membership. Click here to access the SIPC's assessment forms.

SEC Rule 17a-5(e)(4) requires a registered broker-dealer to file, along with its annual audited financials, a supplemental report, covered by an independent accountant's report, which includes procedures related to the broker-dealer's SIPC annual general assessment reconciliation or exclusion-from-membership forms. An example of an independent accountant's report on applying agreed-upon procedures related to the entity's SIPC assessment reconciliation will be included in the 2009 AICPA Audit and Accounting Guide Brokers and Dealers in Securities and posted on the AICPA Web site. The AICPA Stockbrokerage and Investment Banking Expert Panel is developing an independent accountant's illustrative report that covers a broker-dealer's exclusion from SIPC membership. When available, it will be posted on the Web site noted above.
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Publication:CPA Letter
Date:Nov 1, 2009
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