As discussed in last week's newsletter, SEC is seeking comment on amendments to its "broker-dealer financial reporting rule" (Rule 17a-5) under the Securities Exchange Act of 1934, as amended (Exchange Act). While the rule's current requirement that broker-dealers file a report consisting of the audited financial statements and supporting schedules (Financial Report) would remain unchanged, broker-dealers that maintain custody of customer funds and securities (Carrying Brokers) would be required to file (1) a Compliance Report containing a statement and assertions concerning compliance, and internal control over compliance, with specified rules; and (2) an Examination Report from their independent public accountants in accordance with Public Company Accounting Oversight Board (PCAOB) standards that addresses the assertions in the Compliance Report. Non-Carrying Brokers would be required to file a new Exemption Report and a PCAOB report from their independent public accountants. The proposed annual reporting amendments would be effective for annual reports filed with the SEC for fiscal years ending on or after December 15, 2011, with a transition period for fiscal years ending on or after December 15, 2011 but before September 15, 2012. The proposed rules can be found here. Comments are due by August 26, 2011.