What Is the Annual Report Extension Policy?

Under SEA Rule 17a-5(d), broker-dealers are required to file audited annual financial reports with FINRA no later than 60 calendar days after the firm’s fiscal year-end. SEC rules permit extensions of up to 90 calendar days in limited circumstances.

FINRA’s Annual Report Extension Policy outlines the process and documentation firms must submit when requesting additional time beyond the standard filing deadline.

Why the Update Matters

Previously, firms seeking an extension were required to submit a letter from their independent auditor confirming that:

• The firm was in compliance with SEA Rules 15c3-1 (Net Capital) and 15c3-3 (Customer Protection)
• No material weaknesses existed
• An unqualified audit opinion was expected

Many firms and auditors noted that these representations could be difficult—or impossible—to make early in the audit process, particularly when the audit was not yet complete at the time of the extension request. FINRA’s updated policy directly addresses this concern.

Key Changes Under the Updated Policy

The revised policy, effective December 29, 2025, modifies the required representations and documentation as follows:

1. Auditor Representation Requirement Eased

The updated policy removes the requirement that auditors state an unqualified audit opinion is expected. FINRA acknowledges that auditors may not be in a position to make this determination at the extension request stage.

2. Expanded Role for the Principal Financial Officer

Responsibility for certain representations now shifts to the firm’s Principal Financial Officer (PFO). The PFO must represent whether:

• The firm is in compliance with SEA Rules 15c3-1 and 15c3-3
• Any material weaknesses or books and records issues exist
• Other relevant conditions affecting the extension request are present

3. Continued Auditor Involvement

While the auditor’s burden is reduced, firms must still include an auditor letter with the extension request. The letter should:

• Describe audit work completed as of the request date
• Indicate whether the auditor agrees with the PFO’s representations
• Identify any issues that could delay or prevent issuance of the audit report

Transition and Interim Period

FINRA is allowing a transition period for firms filing 2025 annual reports. During this time, firms may use either:

• The updated extension policy, or
• The prior extension policy

Both versions will remain available during the interim period to support a smooth transition.

What This Means for Firms

The revised policy should make it easier for firms to request extensions when audit completion is delayed. By rebalancing representation requirements and recognizing real-world audit timelines, FINRA aims to reduce administrative friction while maintaining financial reporting integrity.

Firms should take proactive steps to:

• Update internal extension request procedures
• Train finance and compliance staff on the new requirements
• Coordinate early with auditors to ensure timely and accurate submissions

Bottom Line

FINRA’s updated Annual Report Extension of Time Request Policy is a practical, industry-informed enhancement to the annual reporting process. By easing certain documentation requirements and clarifying responsibilities, the policy promotes efficiency without compromising investor protection.

Firms approaching upcoming filing deadlines should review the changes carefully and adjust compliance manuals and workflows accordingly.