A FINRA new or continuing membership application requires financial information that is consistent with the applicant’s proposed business, staffing, systems and supervisory structure. The financial portion should tell the same story as the rest of the application.
Realistic projections
Revenue assumptions should reflect the proposed products, customer base, transaction volume and expected launch timetable. Expenses should include personnel, technology, clearing, compliance, audit, insurance, occupancy and other costs required to operate the business described.
Regulatory capital
The applicant should identify its applicable minimum net-capital requirement and maintain an appropriate cushion for operating losses, timing differences and growth. Capital sources and ownership should be clearly documented.
Books, records and reporting
The application should explain how transactions reach the general ledger, who performs reconciliations, how regulatory computations are prepared and reviewed and which systems or service providers support the process.
Plan for questions and changes
Regulatory reviewers may ask for revised projections, additional support or clarification of assumptions. Changes to ownership, business lines, staffing or clearing arrangements should be reflected consistently across the application and financial schedules.