Quick Answer
A customer account statement gives a periodic view of the account's securities positions, money balances, and activity, along with account balances and firm information. It tells the customer to report any discrepancy promptly and to confirm oral communications again in writing to protect the customer's rights under the Securities Investor Protection Act (SIPA).
A statement gives the customer a periodic view of the account's securities positions, money balances, and activity. That is a different document from the account record of the customer's own identifying details, which the SEC governs separately. The required information helps the customer review the account and report errors promptly.
What Information Appears on the Statement?
| Information | What the customer sees |
|---|---|
| Securities positions | A description of securities held in the account |
| Money balances | Cash or other money balances in the account |
| Account activity | Activity in the account since the prior statement |
| Account balances | The opening and closing balances |
| Firm information | The introducing and carrying firms, if different, with customer-service contact information |
| Protection disclosure | A statement that the carrying firm is a Securities Investor Protection Corporation (SIPC) member |
What Advisory Must the Statement Give the Customer?
The statement must advise the customer to:
- report any inaccuracy or discrepancy promptly to the brokerage firm; and
- confirm oral communications again in writing to help protect the customer's rights, including rights under the Securities Investor Protection Act (SIPA).
If an introducing firm and a carrying firm both service the account, the advisory must direct the customer to report the problem to both firms. The statement must also identify both firms and give their customer-service contact information.
In a fully disclosed carrying arrangement, the agreement generally assigns statement preparation and transmission to the carrying firm. That allocation does not remove the statement's two-firm identification and discrepancy-reporting requirements.
Exam Tip: Gotchas
Both firms matter when they share the account relationship. The carrying firm generally prepares and sends the statement, but the statement identifies both firms and tells the customer to report discrepancies to both.
How Are DPP and Unlisted REIT Values Shown?
A statement containing a direct participation program (DPP) or unlisted real estate investment trust (REIT) security must include a per-share estimated value developed through a method reasonably designed to produce a reliable value. Operations questions test that the value must appear, not how the issuer calculates it.
Every statement that gives one of these estimated values must also disclose that the security:
- is not listed on a national securities exchange;
- is generally illiquid; and
- may sell for less than the estimated value shown.
Exam Tip: Gotchas
An estimated value is not a market price. The required disclosure warns that a customer who can sell the security may receive less than the statement's estimated value.
How Is a Statement Different From a Performance Report?
| Document | Question it answers | Information focus |
|---|---|---|
| Customer account statement | What is in the account, and what happened during the period? | Positions, money balances, activity, account balances, and required notices |
| Performance report | How did the account perform? | Account performance |
Exam Tip: Gotchas
The document's purpose controls the classification. Positions, balances, and activity point to an account statement. Information about how the account performed points to a performance report.
What Should You Check on Exam Day?
- Check whether a two-firm account directs discrepancy reports to both firms.
- Separate estimated DPP or unlisted REIT values from market prices.
- Classify positions, balances, and activity as statement information, not performance reporting.