VII. Brokerage Office Business Practices
Sound Financial Circumstances
Section 2-11 of the Rules requires that an applicant for a brokerage licence must satisfy the Council that the applicant is in sound financial circumstances. This requirement is clarified in section 4-4(3)(g) of the Council Bylaws which requires that an applicant for a brokerage licence must provide evidence of unimpaired working capital of an estimate of the operating and capital expenditures of the brokerage for the first three months of operation plus an additional $5,000.00.
Each year, the financial statements for the brokerage must be submitted to the Council with the Accountant’s Report. The Council will consider whether the brokerage continues to be in sound financial circumstances.
Additionally, each brokerage is obligated under section 2-20 of the Rules to advise the Council if, during any year, the brokerage is unable to pay its debts as they come due.