Special Monthly Report Requirement for Broker-Dealers Doing Business in Puerto Rico and Having a Physical Office

July 25, 2017

On June 21, 2017, the Government of Puerto Rico Office of the Commissioner of Financial Institutions (“OCFI”) issued Circular Letter Number CIF-CC-17-1 In accordance with the Office of the Commissioner of Financial Institutions Act and the Uniform Securities Act, the OCFI requires every broker-dealer that conducts business in Puerto Rico and maintains a physical branch office location in the State, to file a monthly report disclosing the aggregate sum of all reporting broker-dealer client holdings in Puerto Rico bonds.1 The report must be broken down by issuer, face value, market value, and amortized cost (adjusted-cost basis). The requirements described in the circular became effective June 21, 2017.

All broker-dealers are required to submit monthly reports to the OCFI Financial Analysis Unit on or before the last day of the month following the reporting month. For example, the circular indicated that the monthly report for June 2017 would have to be submitted on or before July 31, 2017. All reports must be submitted electronically to the email addresses as follows: analisisfinanciero@ocif.pr.govand valores@ocif.pr.gov.

The circular also indicates that the reports must be filed even if a firm has no client holdings in Puerto Rico bonds. In such cases, the firm must file a report indicating there is “Nothing to report.”

The OCFI has provided a report layout, CIF-CC-17-1, at http://www.ocif.gobierno.pr/circulareslista_eng.html.

According to the circular, broker-dealers that fail to comply with the reporting deadlines may be subject to an administrative fine of up to $5,000 imposed by the OCFI. Additionally, any broker-dealer failing to file the required reports could have its license canceled.

For more information, please contact your ACA consultant or contact Dee Stafford at (561) 628-5288 or at dstafford@acacompliancegroup.com.

 


1 Bonds issued by the government of Puerto Rico, its agencies, instrumentalities, and public corporations.