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 (e.g., NASD, OTC)

Client Statements

Pursuant to NYSE Rule 409 the brokerage firm is required to generate and send monthly brokerage statements to its clients. Brokerage statements are similar to monthly bank account statements that you would expect to receive for a checking account, except that the activity covered represents the client’s trading activity.

The monthly brokerage statement must detail the client’s transaction activity for the period, the client’s security positions and any open (unexecuted) orders in the client’s account at the end of the period, and the opening and ending cash balance in the account.

In addition to the details presented above, some firms also provide the clients with cost basis information on open securities positions – ie. how much was paid for the securities owned, the current market value of the securities, and any unrealized gain or loss on the holding – and realized gain and loss data – ie. taxable gains and losses - for transactions posted to the client’s account.

Although the presentation of cost basis and gain/loss information is not required it is often provided as a marketing tool to assist clients with investment planning.

Additionally, some firms present the client with a month end asset allocation which details the types of securities held by the client – equities, fixed income, options etc. – and the percentage of the client’s total portfolio each represents. The presentation of the client’s asset allocation is often expressed graphically – ie. pie-charts.

Brokerage Statement Retention Requirements

See Record Retention

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