Report · Form X‑17A‑5 Part III
First Kentucky Securities Corporation
What its audited annual report to the SEC shows: anything the filing flags, its net capital cushion, where it sits among firms its size, what the notes say, and what each figure means to a counterparty. Every figure from this filing links to its page; peer figures come from other firms' filings. Nothing is estimated.
- SEC file number
- 8-22224
- Fiscal year ended
- September 30, 2025
- Filing read
- Form X-17A-5, filed December 29, 2025, 0000225345-25-000004
Audited annual report, Form X‑17A‑5 Part III, fiscal year ended September 30, 2025, accession 0000225345-25-000004, as filed on EDGAR. Every figure is read from the filing and cited to its page. Measured error rates, and the fields not yet measured, are on cushionrank.com/methodology. Anything we computed says so and shows its formula. The report is as of that one day and says nothing about the firm since. Check a figure against its page before relying on it.
This report is general information published to every buyer alike. It is not investment advice, is not tailored to you, and is not a credit rating or a consumer report. It is sold under the terms at cushionrank.com/terms/v2; anyone other than the buyer who reads it relies on it at their own risk. Helmswick Systems Inc. holds no interest in any firm named and takes no payment from one beyond the usual price of a report. CushionRank is a business name of Helmswick Systems Inc.
Going concern, controls and net capital: what the filing says
As of September 30, 2025. Quotations are the filing's words, with their page; everything else is our description.
- Going‑concern languageWhether the auditor's report or the notes say there is, or was before management's plans, substantial doubt about the firm's ability to continue as a going concern. The page prints the sentences as written and names which document said them. Where the notes say management's plans alleviated the doubt, the page prints that sentence too, at the same weight; the accounting standard then treats substantial doubt as not existing.
- None found in the opinion or the notes.
- Material weaknessA weakness in the firm's controls over compliance with the SEC's net capital and customer protection rules, serious enough that a breach might not be prevented or caught in time. It is a finding about controls, not that a rule was broken; whether the firm complied at year end is a separate statement in the same report. Under the SEC's rules, only firms that file a compliance report, rather than an exemption report, report on this.
- None found in the public copy of the filing. Only a compliance report reports on this, or, for a firm also registered with the CFTC, an auditor's report under CFTC Regulation 1.16, so a filing with neither carries no finding either way.
- Below the net capital requirementNet capital below the requirement on the computation the filing prints, as of the fiscal year end. Rule 15c3‑1 requires a firm to hold at least its requirement at all times, and Rule 17a‑11 requires it to notify the SEC and its examining authority the same day it falls below. The filing is as of that one day.
- None at September 30, 2025: net capital exceeded the requirement by $1,167,955 p. 27.
Headline figures
Whole dollars, as printed · anything else says computed
Net capitalEquity adjusted the way Rule 15c3‑1 requires: assets that can't be turned into cash quickly come out, securities positions are marked down by set percentages called haircuts, and qualifying subordinated loans go in. The firm computes it on a schedule in the filing.$1,267,955p. 27
net capital 12.7× the requirement (computedNot a line in the filing. Net capital ÷ requirement: 1,267,955 ÷ 100,000 = 12.7×, p. 27.)
RequirementThe least net capital SEC Rule 15c3‑1 lets this firm hold: under the aggregate‑indebtedness method, the larger of a fixed dollar minimum, set by what the firm does, and 6⅔% of its aggregate indebtedness; under the alternative method, the larger of $250,000 and 2% of aggregate debit items. Below it the firm is in breach of the rule and must notify the SEC and its examining authority the same day.$100,000p. 27
Excess net capitalNet capital minus the requirement: how far net capital could fall, at the fiscal year end, before it reached the requirement.$1,167,955p. 27
Total assetsEverything the firm owns or is owed at fiscal year end, at the values the audited statement carries. Firms are grouped into size bands by this figure.$3,518,643p. 7
EquityWhat is left of total assets after everything the firm owes: the owners' stake in the firm. Net capital starts here and adjusts from there.$1,376,866p. 7
Aggregate indebtedness ratioAggregate indebtedness, the firm's liabilities less items the rule excludes such as subordinated borrowings, divided by net capital. Under the aggregate‑indebtedness method the rule caps it at 15 to 1 (8 to 1 in a firm's first year), and a firm above 12 to 1 must notify the SEC and its examining authority within 24 hours. A lower ratio means less owed against the cushion. Firms under the alternative method don't compute it.0.92 to 1p. 27
The requirement is at least the larger of this firm's $100,000 minimum p. 16 and 6⅔% of aggregate indebtedness. Aggregate indebtedness, the firm's liabilities less items the rule excludes such as subordinated borrowings, was $1,164,962 p. 27. Under this method the rule caps the ratio at 15 to 1.
This is a real firm's report, in full, as a buyer gets it. The report on any other firm is US$99 from that firm's page, and prints to PDF with a cover, every page reference and a glossary.
Among firms its size
Total assets $1M to $10M · 430 of the band's 915 firms clear fully disclosed through a clearing firm · corpus version 03aaa6d87ba8
A placement is arithmetic: where one ratio from this filing falls among the same ratio for other firms its size that print it. It is not a rating of the firm.
| Figure | This firm | Position in bandWhere this firm's figure sits among the firms its size that print it. Each strip is a box plot: the grey box runs from the 25th to the 75th percentile, the thin line from the 10th to the 90th, the black tick is the median and the teal bar is this firm. The numbers under a strip are its 25th, median and 75th. | FirmsHow many firms in the comparison group print the figures the row needs. The rest leave at least one of them out of the public part of their filing, so the percentiles cover only the firms that print them. |
|---|---|---|---|
| Net capital, multiple of requirementNet capital divided by the requirement. 1.0× means net capital just equals the requirement. A firm that falls below 1.2× must notify the SEC and its examining authority within 24 hours. Which leg of the requirement binds differs by firm, so read the multiple alongside the aggregate‑indebtedness ratio. computed · percentile 50higher: more net capital per dollar of requirement | 12.7×p. 27 | 6.5×12.7×26.7×10th percentile3.4×25th percentile6.5×Median12.7×75th percentile26.7×90th percentile61.3×10th 3.4× · 90th 61.3× | 416 |
| Aggregate indebtedness to net capitalAggregate indebtedness printed in dollars, divided by net capital. Under the aggregate‑indebtedness method the rule caps it at 15 to 1, and above 12 to 1 a firm must notify its regulator. The lower it is, the less is owed against each dollar of cushion. computed · percentile 70higher: more indebtedness per dollar of net capital | 0.92 to 1p. 27 | 0.12 to 10.39 to 11.13 to 110th percentile0.04 to 125th percentile0.12 to 1Median0.39 to 175th percentile1.13 to 190th percentile2.79 to 110th 0.04 to 1 · 90th 2.79 to 1 | 174 |
| Equity to total assetsEquity divided by total assets: the share of the firm's assets its owners fund rather than its creditors. computed · percentile 16higher: more of the assets funded by the owners | 39.1%p. 7 | 48.9%69.0%85.2%10th percentile32.6%25th percentile48.9%Median69.0%75th percentile85.2%90th percentile94.3%10th 32.6% · 90th 94.3% | 428 |
| Equity not counted in net capitalThe share of equity, with subordinated borrowings added, that the net capital computation does not count: (equity + subordinated borrowings − net capital) ÷ equity. Non‑allowable assets and haircuts are most of it; the schedule prints both totals. computed · percentile 20higher: more of the equity not counted as net capital | 7.9%pp. 7–27 | 9.8%22.5%41.4%10th percentile3.7%25th percentile9.8%Median22.5%75th percentile41.4%90th percentile62.1%10th 3.7% · 90th 62.1% | 411 |
| MarginNet income divided by revenues: what the year left as profit, or loss, on each dollar earned. Compared only among the firms that publish an income statement. computed · percentile 47higher: more of revenue kept as net income | 5.5%pp. 8–9 | 0.5%6.1%19.3%10th percentile−4.0%25th percentile0.5%Median6.1%75th percentile19.3%90th percentile43.1%10th −4.0% · 90th 43.1% | 149 |
grey box: 25th to 75th percentile, where half the firms sitthin line: 10th to 90th percentileblack tick: medianteal bar: this firmhover or tap a strip for its percentiles
Each row places a ratio from this filing's own figures among the same ratio in its peers' filings. Every strip uses the same layout, and the grey box is always the same width. The two multiples are on a ratio scale, so the same step is the same multiple anywhere on the strip; the percentages are on a plain scale, since they can run below zero. A dashed teal bar means the firm's value lies beyond the end of the strip. Net capital as a multiple of requirement, aggregate indebtedness to net capital, equity to total assets, equity not counted in net capital and margin: compared with firms its size that clear fully disclosed through a clearing firm. Margin is placed among those of them that publish an income statement.
Statement of financial condition
Balance sheet · September 30, 2025 · whole dollars, as printed
| Line | Amount | Page |
|---|---|---|
| Total assetsEverything the firm owns or is owed at fiscal year end, at the values the audited statement carries. Firms are grouped into size bands by this figure. | $3,518,643 | p. 7 |
| Total liabilitiesEverything the firm owes at year end. Aggregate indebtedness, on the net capital computation, starts from this figure and leaves out a few items, such as subordinated borrowings. | 2,141,777 | p. 7 |
| Subordinated borrowingsLoans to the firm that rank behind its general creditors, under an agreement its examining authority has found acceptable. Because of that, the rule lets the firm count them toward net capital. | 0 | p. 11 |
| EquityWhat is left of total assets after everything the firm owes: the owners' stake in the firm. Net capital starts here and adjusts from there. | $1,376,866 | p. 7 |
Statement of income
| RevenuesWhat the firm earned in the year before any expenses. For a broker‑dealer, mostly commissions, fees and trading gains; the statement of income itemizes them. | $6,091,811 | p. 8 |
| ExpensesWhat the year cost: pay, clearing charges, occupancy and the rest. | 5,657,176 | p. 9 |
| Provision for income taxesThe income tax charged against the year's profit as the firm books it, which need not be what it paid. A firm taxed through its owners, such as an S corporation, may show none. | 102,812 | p. 9 |
| Net incomeRevenues less expenses, tax included: the year's profit or loss. It adds to equity, and to net capital so far as it is held in assets the rule allows. | $331,823 | p. 9 |
This filing includes one. 298 of the band's 915 firms publish one: the rule makes the statement of financial condition public, and publishing the income statement is the firm's choice.
The notes, read
What our reading of the notes and the opinion records
- Expense‑sharing agreementAn agreement, described in the notes, under which the firm and a parent or affiliate share expenses, services or costs.
- None described in the notes.
- Subordinated borrowingsLoans to the firm that rank behind its general creditors, under an agreement its examining authority has found acceptable. Because of that, the rule lets the firm count them toward net capital.
- $0 p. 11
- Customer protectionSEC Rule 15c3‑3. A firm that holds customers' securities must keep their fully paid and excess margin securities in its possession or control, and must keep a reserve bank account for customers funded to at least what the rule's formula computes. A firm may instead claim an exemption under paragraph (k); the filing names the basis it relies on.
- The filing names two bases: paragraph (k)(2)(i) of Rule 15c3‑3An exemption from Rule 15c3‑3 for a firm that carries no margin accounts, promptly transmits customer funds and delivers securities, does not otherwise hold funds or securities for customers, and effects all financial transactions with customers through a bank account kept for their exclusive benefit. and paragraph (k)(2)(ii) of Rule 15c3‑3An exemption from Rule 15c3‑3 for an introducing firm that clears all customer transactions fully disclosed through a clearing firm and promptly passes all customer funds and securities to it..
- Audit opinion coversWhether the auditor's opinion covers every statement in the filing or only the statement of financial condition. A firm may file its statement of financial condition, the notes and the auditor's report on it publicly and ask for the rest to be kept confidential; the public opinion then covers that one statement alone.
- Full statements. The opinion is unqualifiedThe auditor's opinion that the statements present fairly, in all material respects, in conformity with the applicable framework. It can still carry an explanatory paragraph, such as one on going concern, that does not change the opinion. The alternatives are a qualified opinion (“except for”), an adverse opinion and a disclaimer of opinion. and dated December 23, 2025.
- What the public copy includes
- All four statements: financial condition, income, changes in equity and cash flows.
What each figure means to a counterparty
The same words in every report · nothing here is about this firm
- Net capital, the requirement and the excess
- Net capital is the firm's capital as Rule 15c3‑1 measures it, after taking out assets that can't be turned into cash quickly. Below the requirement the firm is in breach of the rule and must notify the SEC and its examining authority the same day, so the excess is how far net capital could fall, at that date, before it reached that line. All three are as of one day, the fiscal year end. The annual report is filed after that day and says nothing about the firm's position since.
- Net capital, multiple of requirement
- Sets net capital against the firm's own floor, so firms of different sizes read on one scale: 1.0× is the floor, and below 1.2× a firm must notify its regulator. It compares unevenly, because the requirement is a fixed dollar minimum for some firms and, for others, a share of what they owe or of what their customers owe them; a firm on a small minimum can show a high multiple on little money. Read it with the excess in dollars.
- Aggregate indebtedness to net capital
- How much the firm owes, by the rule's measure, for each dollar of net capital. Under the aggregate‑indebtedness method the rule caps it at 15 to 1, and above 12 to 1 a firm must notify its regulator. The lower it is, the less is owed against each dollar of cushion. Firms under the alternative method don't compute it.
- Equity to total assets
- The share of the firm's assets its owners fund. It counts every asset, including those the rule deducts from net capital because they can't be turned into cash quickly, so read it beside the net capital figures rather than instead of them.
- Equity not counted in net capital
- The share of the owners' stake, with subordinated borrowings added, that the rule's deductions and haircuts take out before net capital. It shows how much of the equity on the balance sheet the rule counts, which equity to total assets alone does not.
- Margin
- Net income as a share of revenues for the year. Profit adds to equity, and to net capital so far as it is held in assets the rule allows; a loss takes from equity, and from net capital unless it falls on assets the rule already deducts. It is placed only among firms that publish an income statement.
- Going‑concern language
- The auditor's or the firm's own sentences on whether there is substantial doubt about the firm's ability to continue as a going concern. Management looks at the year after the statements are issued; the auditor at a reasonable period not beyond a year after the balance sheet date. Where the notes say management's plans alleviated the doubt, the accounting standard treats substantial doubt as not existing. The report quotes the sentences as written and adds nothing to them. An auditor's report without such a paragraph is not an assurance that a firm will continue.
The firm and the filing
From the filing and the SEC's records
- Auditor
- Rodefer Moss & Co, PLLC
- Audit opinion coversWhether the auditor's opinion covers every statement in the filing or only the statement of financial condition. A firm may file its statement of financial condition, the notes and the auditor's report on it publicly and ask for the rest to be kept confidential; the public opinion then covers that one statement alone.
- Full statements
- ClearingWho holds customers' cash and securities and settles their trades. A firm that clears fully disclosed hands that work to a clearing firm, which knows the customers by name. A firm that carries customer or broker‑dealer accounts and receives or holds their funds or securities must generally hold at least $250,000 in net capital; other firms have lower minimums.
- Fully disclosed
- Clearing firm
- RBC Dain
- Net capital methodWhich of Rule 15c3‑1's two formulas sets the firm's requirement. Under the aggregate‑indebtedness method it is the larger of a fixed minimum and 6⅔% of what the firm owes. Under the alternative method, which a firm may elect instead, it is the larger of $250,000 and 2% of aggregate debit items as the customer reserve formula computes them.
- Aggregate indebtedness
- Source filing on EDGAR
- 0000225345-25-000004
Provenance
Every figure in this report, where it is printed and how it was read
| Figure, and its line as printed | Amount | Page |
|---|---|---|
| Total assets“Total assets” | $3,518,643 | p. 7 |
| Total liabilities“Total liabilities” | 2,141,777 | p. 7 |
| Subordinated borrowings“Subordinated liabilities at end of year” | 0 | p. 11 |
| Equity“Total stockholders' equity” | 1,376,866 | p. 7 |
| Net capital“Net capital” | 1,267,955 | p. 27 |
| Requirement“Minimum net capital required” | 100,000 | p. 27 |
| Minimum dollar requirement“required to maintain a minimum net capital of not less than $100,000” | 100,000 | p. 16 |
| Excess net capital“Excess net capital” | 1,167,955 | p. 27 |
| Aggregate indebtedness“Aggregate indebtedness: Accounts payable, accrued liabilities, taxes payable” | 1,164,962 | p. 27 |
| Aggregate indebtedness ratio“.92 to 1” | 0.92 to 1 | p. 27 |
| Revenues“Total revenues” | 6,091,811 | p. 8 |
| Expenses“Total expenses” | 5,657,176 | p. 9 |
| Provision for income taxes“Income Tax Expense” | 102,812 | p. 9 |
| Net income“Net income” | 331,823 | p. 9 |
| Non‑allowable assets“Total deductions” | 52,693 | p. 27 |
| Haircuts“Reduction of securities held in inventory” | 56,218 | p. 27 |
| Computed | Result |
|---|---|
| Net capital, multiple of requirement1,267,955 ÷ 100,000, p. 27 | 12.7× |
| Aggregate indebtedness to net capital1,164,962 ÷ 1,267,955, p. 27 | 0.92 to 1 |
| Equity to total assets1,376,866 ÷ 3,518,643, p. 7 | 39.1% |
| Equity not counted in net capital(1,376,866 + 0 − 1,267,955) ÷ 1,376,866, pp. 7–27 | 7.9% |
| Margin331,823 ÷ 6,091,811, pp. 8–9 | 5.5% |
- Accession
- 0000225345-25-000004
- Filed with the SEC
- December 29, 2025
- Corpus version
- 03aaa6d87ba8, prompt 18cf822f
- Printed
A language model reads each filing from its pages on EDGAR and records every figure with its label as printed and its page. Software then checks the figures against each other: assets against liabilities and equity, net capital less the requirement against the stated excess, aggregate indebtedness over net capital against the stated ratio. A figure that fails a check is read again; one that still fails is printed as filed, with a notice beside it. Band percentiles use computed ratios only, across every filing in the band that prints the figures a ratio needs. The corpus version names the build the report was rendered from. The full method and its measured error rates are on the methodology page.
General information, the same for every reader. It is not investment, legal, accounting, tax or regulatory advice; it is not tailored to anyone; and it is not a credit rating, a consumer report or a view on any firm's soundness. A placement is where one ratio from a filing falls among the same ratio for other firms of the same size: arithmetic, not a rating. The explanations of rules are general summaries, and the rules themselves govern.
CushionRank is independent of the firms, their auditors, FINRA and the SEC. Helmswick Systems Inc. holds no interest in any firm named and takes no payment from one beyond the usual price of a report, and no one pays to be listed or to change a page. EDGAR is a trademark of the SEC; CushionRank is not affiliated with or approved by the SEC.
Anyone may report an error, and a firm named may dispute any statement of fact, at support@cushionrank.com. A firm named may buy its own report at the usual price.
Every figure on this page is from First Kentucky Securities Corporation's annual report on Form X‑17A‑5 for the fiscal year ended September 30, 2025, as filed on EDGAR, with the page it came from; peer figures are from other firms' reports. This is general information, the same for every reader: not investment advice, not a rating, and no view on the firm. CushionRank (Helmswick Systems Inc.) is independent of the firm, its auditor, FINRA and the SEC, and takes no payment from any firm named beyond the usual price of a report. Report an error in this report; how filings are read, and what we do about errors, is on /methodology.
Glossary
What each line on the pages before means · sold under the terms at cushionrank.com/terms/v2
- Net capital
- Equity adjusted the way Rule 15c3‑1 requires: assets that can't be turned into cash quickly come out, securities positions are marked down by set percentages called haircuts, and qualifying subordinated loans go in. The firm computes it on a schedule in the filing.
- Computed
- Not a line in the filing: arithmetic on figures the filing prints, shown with its formula.
- Requirement
- The least net capital SEC Rule 15c3‑1 lets this firm hold: under the aggregate‑indebtedness method, the larger of a fixed dollar minimum, set by what the firm does, and 6⅔% of its aggregate indebtedness; under the alternative method, the larger of $250,000 and 2% of aggregate debit items. Below it the firm is in breach of the rule and must notify the SEC and its examining authority the same day.
- Excess net capital
- Net capital minus the requirement: how far net capital could fall, at the fiscal year end, before it reached the requirement.
- Total assets
- Everything the firm owns or is owed at fiscal year end, at the values the audited statement carries. Firms are grouped into size bands by this figure.
- Equity
- What is left of total assets after everything the firm owes: the owners' stake in the firm. Net capital starts here and adjusts from there.
- Aggregate indebtedness ratio
- Aggregate indebtedness, the firm's liabilities less items the rule excludes such as subordinated borrowings, divided by net capital. Under the aggregate‑indebtedness method the rule caps it at 15 to 1 (8 to 1 in a firm's first year), and a firm above 12 to 1 must notify the SEC and its examining authority within 24 hours. A lower ratio means less owed against the cushion. Firms under the alternative method don't compute it.
- Going‑concern language
- Whether the auditor's report or the notes say there is, or was before management's plans, substantial doubt about the firm's ability to continue as a going concern. The page prints the sentences as written and names which document said them. Where the notes say management's plans alleviated the doubt, the page prints that sentence too, at the same weight; the accounting standard then treats substantial doubt as not existing.
- Material weakness
- A weakness in the firm's controls over compliance with the SEC's net capital and customer protection rules, serious enough that a breach might not be prevented or caught in time. It is a finding about controls, not that a rule was broken; whether the firm complied at year end is a separate statement in the same report. Under the SEC's rules, only firms that file a compliance report, rather than an exemption report, report on this.
- Below the net capital requirement
- Net capital below the requirement on the computation the filing prints, as of the fiscal year end. Rule 15c3‑1 requires a firm to hold at least its requirement at all times, and Rule 17a‑11 requires it to notify the SEC and its examining authority the same day it falls below. The filing is as of that one day.
- Position in band
- Where this firm's figure sits among the firms its size that print it. Each strip is a box plot: the grey box runs from the 25th to the 75th percentile, the thin line from the 10th to the 90th, the black tick is the median and the teal bar is this firm. The numbers under a strip are its 25th, median and 75th.
- Firms
- How many firms in the comparison group print the figures the row needs. The rest leave at least one of them out of the public part of their filing, so the percentiles cover only the firms that print them.
- Net capital, multiple of requirement
- Net capital divided by the requirement. 1.0× means net capital just equals the requirement. A firm that falls below 1.2× must notify the SEC and its examining authority within 24 hours. Which leg of the requirement binds differs by firm, so read the multiple alongside the aggregate‑indebtedness ratio. Here 1,267,955 ÷ 100,000 = 12.7×, p. 27.
- Aggregate indebtedness to net capital
- Aggregate indebtedness printed in dollars, divided by net capital. Under the aggregate‑indebtedness method the rule caps it at 15 to 1, and above 12 to 1 a firm must notify its regulator. The lower it is, the less is owed against each dollar of cushion. Here 1,164,962 ÷ 1,267,955 = 0.92 to 1, p. 27.
- Equity to total assets
- Equity divided by total assets: the share of the firm's assets its owners fund rather than its creditors. Here 1,376,866 ÷ 3,518,643 = 39.1%, p. 7.
- Equity not counted in net capital
- The share of equity, with subordinated borrowings added, that the net capital computation does not count: (equity + subordinated borrowings − net capital) ÷ equity. Non‑allowable assets and haircuts are most of it; the schedule prints both totals. Here (1,376,866 + 0 − 1,267,955) ÷ 1,376,866 = 7.9%, pp. 7–27.
- Margin
- Net income divided by revenues: what the year left as profit, or loss, on each dollar earned. Compared only among the firms that publish an income statement. Here 331,823 ÷ 6,091,811 = 5.5%, pp. 8–9.
- Total liabilities
- Everything the firm owes at year end. Aggregate indebtedness, on the net capital computation, starts from this figure and leaves out a few items, such as subordinated borrowings.
- Subordinated borrowings
- Loans to the firm that rank behind its general creditors, under an agreement its examining authority has found acceptable. Because of that, the rule lets the firm count them toward net capital.
- Revenues
- What the firm earned in the year before any expenses. For a broker‑dealer, mostly commissions, fees and trading gains; the statement of income itemizes them.
- Expenses
- What the year cost: pay, clearing charges, occupancy and the rest.
- Provision for income taxes
- The income tax charged against the year's profit as the firm books it, which need not be what it paid. A firm taxed through its owners, such as an S corporation, may show none.
- Net income
- Revenues less expenses, tax included: the year's profit or loss. It adds to equity, and to net capital so far as it is held in assets the rule allows.
- Expense‑sharing agreement
- An agreement, described in the notes, under which the firm and a parent or affiliate share expenses, services or costs.
- Customer protection
- SEC Rule 15c3‑3. A firm that holds customers' securities must keep their fully paid and excess margin securities in its possession or control, and must keep a reserve bank account for customers funded to at least what the rule's formula computes. A firm may instead claim an exemption under paragraph (k); the filing names the basis it relies on.
- paragraph (k)(2)(i) of Rule 15c3‑3
- An exemption from Rule 15c3‑3 for a firm that carries no margin accounts, promptly transmits customer funds and delivers securities, does not otherwise hold funds or securities for customers, and effects all financial transactions with customers through a bank account kept for their exclusive benefit.
- paragraph (k)(2)(ii) of Rule 15c3‑3
- An exemption from Rule 15c3‑3 for an introducing firm that clears all customer transactions fully disclosed through a clearing firm and promptly passes all customer funds and securities to it.
- Audit opinion covers
- Whether the auditor's opinion covers every statement in the filing or only the statement of financial condition. A firm may file its statement of financial condition, the notes and the auditor's report on it publicly and ask for the rest to be kept confidential; the public opinion then covers that one statement alone.
- Unqualified opinion
- The auditor's opinion that the statements present fairly, in all material respects, in conformity with the applicable framework. It can still carry an explanatory paragraph, such as one on going concern, that does not change the opinion. The alternatives are a qualified opinion (“except for”), an adverse opinion and a disclaimer of opinion.
- Clearing
- Who holds customers' cash and securities and settles their trades. A firm that clears fully disclosed hands that work to a clearing firm, which knows the customers by name. A firm that carries customer or broker‑dealer accounts and receives or holds their funds or securities must generally hold at least $250,000 in net capital; other firms have lower minimums.
- Net capital method
- Which of Rule 15c3‑1's two formulas sets the firm's requirement. Under the aggregate‑indebtedness method it is the larger of a fixed minimum and 6⅔% of what the firm owes. Under the alternative method, which a firm may elect instead, it is the larger of $250,000 and 2% of aggregate debit items as the customer reserve formula computes them.