Rule 17a-13, Quarterly Security Counts to be made by Certain Exchange Members, Brokers, and Dealers

Paragraph (b) of Rule 17a-13 (17 CFR 240.17a-3) generally requires that at least once each calendar quarter, all registered broker-dealers physically examine and count all securities held and account for all other securities not in their possession, but subject to the broker-dealer’s control or direction. Any discrepancies between the broker-dealer’s securities count and the firm’s records must be noted and, within seven days, the unaccounted for difference must be recorded in the firm’s records. Paragraph (c) of Rule 17a-13 provides that under specified conditions, the securities count, examination, and verification of a broker-dealer’s entire list of securities may be conducted on a cyclical basis rather than on a certain date. Although Rule 17a-13 does not require a broker-dealer to file a report with the Commission, discrepancies between a broker-dealer’s records and its securities count may be required to be reported, for example, as a loss on Form X-17A-5 (17 CFR 248.617), which must be filed with the Commission under Exchange Act Rule 17a-5. Rule 17a-13 exempts broker-dealers that limit their business to the sale and redemption of securities of registered investment companies or interests or participation in an insurance company separate account and those who solicit accounts for federally insured savings and loan associations, provided that such persons promptly transmit all funds and securities and hold no customer funds and securities. Rule 17a-13 also does not apply to certain broker-dealers required to register only because they effect transactions in securities futures products. Rule 17a-13 requires the recording of only those differences in the broker-dealer’s records that remain unresolved seven business days after the date of the examination, count, and verification. The Commission or the self-regulatory organization (“SRO”) designated as the broker-dealer’s examining authority may examine these recorded discrepancies in a broker-dealer’s records to determine whether they are the result of the firm’s inability to maintain control of its business.

The latest form for Rule 17a-13, Quarterly Security Counts to be made by Certain Exchange Members, Brokers, and Dealers expires 2029-01-31 and can be found here.