FINRA will update the FOCUS filing system for broker-dealers to comply with the SEC's recently adopted amendments to disclosure requirements for SEC-regulated entities. As previously covered, the SEC's adopted amendments were part of an effort to (i) reduce regulatory burden, (ii) align regulations with recent changes in U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), and (iii) implement the Fixing America's Surface Transportation (FAST) Act.
The updates will include revising the FOCUS reports to reflect updated U.S. GAAP requirements, including revising the Statement of Financial Condition and the Statement of Income in the FOCUS reports to include new line items added for the reporting of comprehensive income. In addition, the updates will require that a broker-dealer's annual audit report include a Statement of Comprehensive Income, in lieu of a Statement of Income, to the extent there is other comprehensive income for the relevant period.
The new FOCUS reporting requirements will apply to FOCUS reports filed for periods ending in January 2019.
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