Haw. Code R. § 16-39-404 - Financial requirements

(a) Every registered broker-dealer shall file an annual report of condition within ninety calendar days following the end of the calendar or fiscal year adopted as follows:

(1) Broker-dealers registered under the Securities Exchange Act shall file a copy of the annual financial report filed with the SEC; and

(2) All other broker-dealers shall file audited financial statements that evidences the broker-dealer's compliance with the requirements of subsection (b).

(b) A broker-dealer that is subject to subsection (a)(2) shall have at all times a minimum net capital of not less than $5,000. As used in this section, "net capital" shall mean net worth, or the difference between total assets and total liabilities or indebtedness, after adjustment to eliminate or revise assets of doubtful or uncertain value and to reflect true liabilities, in accordance with the following schedule:

(1) Asset items not allowable:

(A) Furniture, fixtures, and equipment; and

(B) Intangible items, such as goodwill, prepaid preincorporation, or organizational expenses, etc.; and

(2) Asset items to be adjusted or substantiated:

(A) Securities owned shall be adjusted to market value;

(B) Value of real estate shall be attested to by qualified and disinterested persons;

(C) Property in joint ownership shall be limited to applicant's interest therein; and

(D) Value of unsecured notes, accounts receivable, or advanced commissions due from an agent, officer, director, partner, or affiliate may be required by the commissioner to be substantiated by an opinion of a bank, finance company, or other lending institution satisfactory to the commissioner.

(c) Broker-dealers registered in this State, who are registered with the SEC and are members of FINRA, may satisfy the annual report requirements of this section by complying with the following:

(1) The broker-dealer files its annual audited financial report with FINRA;

(2) The broker-dealer's annual audited financial reports filed with FINRA are current;

(3) The broker-dealer notifies the commissioner in writing within twenty-four hours if the broker-dealer's net capital fails to meet the minimum amount required under this section;

(4) The broker-dealer shall provide the commissioner with financial information within one business day following a request for such information from the commissioner; and

(5) The broker-dealer shall complete the "Waiver Eligibility Certification" form.

Notes

Haw. Code R. § 16-39-404

[Eff 6/30/08] (Auth: HRS §§ 485A-406485A-411, 485A-606) (Imp: HRS §§ 485A-406485A-411, 485A-606) Am and comp 11/18/2023