Quick Answer
A customer account statement reports positions, money balances, and activity, and it differs from a performance report. A confirmation reports what the firm did and in what capacity, due at or before completion of the transaction. Tax forms report the year's activity, and a false price or withheld document is always prohibited.
The whole unit on one sheet: statements, confirmations, tax reporting, and the pricing-document rules that keep every one of them honest.
Which One-Liners Win Points?
- A statement is not a performance report. A statement shows positions, money balances, and activity. A performance report shows how the account performed.
- Two firms, two reports. When an introducing firm and a carrying firm both service an account, the discrepancy advisory directs the customer to report to both.
- Completion controls confirmation timing, not execution. The confirmation is due at or before completion of the transaction, so a fixed number of days after execution misstates the general rule.
- Capacity drives the disclosure path. An agent discloses the other party and remuneration. A principal discloses market-maker status and applicable price differences.
- Periodic reporting needs advance notice. A firm may replace an immediate confirmation with periodic reporting only after prior written notice of that alternative.
- An election works only where the facts allow one. Optional withholding follows a valid election. Required withholding applies even if the customer prefers otherwise.
- Falsifying and withholding are different sins. Falsifying gives untrue information. Withholding keeps required information from the customer entirely.
- Direction never excuses a false price. A false price is prohibited whether it favors or disfavors the customer.
Which Numbers Matter Most?
| Item | Value |
|---|---|
| Periodic or investment company plan reporting period | quarterly |
| Qualifying no-load stable-net-asset-value money market fund reporting | monthly |
| Periodic statement deadline | 5 business days after the period ends |
| Final prospectus or registration notice delivery | no later than 2 business days after completion of sale |
| Preliminary prospectus delivery, covered new-issuer distribution | at least 48 hours before the confirmation |
What Belongs on a Customer Account Statement?
- The statement shows securities positions, money balances, account activity, opening and closing balances, and both firm names with customer-service contact information.
- It discloses Securities Investor Protection Corporation (SIPC) membership and advises the customer to report inaccuracies promptly and to reconfirm oral communications in writing, protecting rights under the Securities Investor Protection Act (SIPA).
- A direct participation program (DPP) or unlisted real estate investment trust (REIT) value must be a reliably developed per-share estimate, disclosed as not exchange-listed, generally illiquid, and possibly worth less than that estimate.
What Must a Confirmation Disclose?
- Every covered confirmation states the date, the time or its availability on request, the security's identity, the price, the shares or principal amount, and whether the firm acted as agent or principal.
- An agency confirmation adds the other party's name (or its availability), customer-paid remuneration unless a non-transaction-based written agreement sets it, and any payment-for-order-flow disclosure. A principal confirmation adds market-maker status and, for a National Market System (NMS) stock, the price difference from the firm's own trade.
- Conditional disclosures follow the security: early-call terms for redeemable debt, dollar price and yield for yield-basis debt, prepayment variability for asset-backed debt, and notice of no SIPC membership.
Which Gotchas Trip Students Up?
- Both firms matter when they share the account relationship. The carrying firm generally prepares and sends the statement, but it identifies both firms and directs discrepancies to both.
- An estimated value is not a market price. The DPP or REIT disclosure warns that a selling customer may receive less than the estimated value shown.
- The document's purpose controls the classification. Positions, balances, and activity point to a statement. Performance information points to a performance report.
- A periodic statement can report more than trades, including dividends and distributions, but only after prior written notice of the alternative.
- A customer instruction does not turn required withholding into optional withholding. Ask first whether the facts permit an election.
- An accurate document can still be improperly withheld, and a delivered document can still be falsified. Treat these as separate prohibited conduct.
One-Breath Recap
An account statement tells the customer what is in the account and what happened during the period, a confirmation tells the customer what the firm did and in what capacity by transaction completion, and a tax form tells the customer and the taxing authority what the account did during the year, with cost basis as the starting figure that required adjustments turn into adjusted basis. Periodic reporting can stand in for an immediate confirmation only with prior written notice, and a prospectus runs on its own delivery clock separate from the confirmation. Across every document, a false price is prohibited regardless of which way it tilts the numbers, and withholding a required document is prohibited even when nothing on it is false.
Need more than the recap? Read the full Account Statements and Confirmations unit.