Furnishing the Firm's Financial Condition

Who Can Request to Inspect the Firm's Balance Sheet?

• Bona fide regular customer, for this right, means any person who, in the regular course of the firm's business, has cash or securities in the firm's possession.
• The firm must make available, for inspection, information about its financial condition as disclosed in its most recent balance sheet, prepared under the firm's usual practice, as required by federal or state securities law, or as required by any rule or regulation under that law.

Can the Firm Deliver the Balance Sheet Instead of Making It Available?

• Yes. Instead of making the balance sheet available for on-site inspection, the firm may deliver it to the requesting customer, in paper or electronic form.
• Electronic delivery requires the customer's consent to receive the balance sheet electronically. That consent condition applies only to electronic delivery, not to paper delivery or to on-site inspection.

Exam Tip: Gotchas

• The firm chooses between making the balance sheet available for inspection and delivering it; it is not required to do both.
• Electronic delivery is conditional on consent. A firm cannot default a customer into an emailed balance sheet without that customer agreeing to it first.

What Should You Check on Exam Day?

• Match "bona fide regular customer" (cash or securities in the firm's possession) to the inspection-or-delivery choice.
• Electronic delivery needs the customer's consent; paper delivery and on-site inspection do not.
• The balance sheet is the firm's most recent one, prepared under the firm's usual practice or as securities law or a rule under it requires.
• Remember delivery can substitute for inspection for a customer, but the firm is not required to offer both.