FINRA Rule 2231: Customer Statement Rules, Delivery, and Disclosures

FINRA Rule 2231 requires broker-dealers that carry customer accounts to send each customer a written account statement at least once every calendar quarter, showing every security position, cash balance, transaction, and fee for the period. Amendments effective January 1, 2024, added eight supplementary materials that spell out front-page disclosures, electronic delivery, third-party recipients, externally held assets, summary statements, and valuation rules for illiquid holdings.¹

Which Firms the Rule Covers

The rule applies to every “general securities member,” meaning any FINRA member that conducts a general securities business and computes net capital under SEC Rule 15c3-1. In practice that covers broker-dealers that hold customer funds or securities or carry customer accounts. Firms that do neither fall outside the rule.²

When an account involves both an introducing firm and a separate carrying (clearing) firm, the carrying agreement under FINRA Rule 4311 generally puts the responsibility for preparing and transmitting statements on the carrying firm, which also safeguards customer funds and securities under SEC Rule 15c3-3.²

What Must Appear on the Statement

Each statement has to give the customer a full picture of holdings, activity, and cost during the period. The required content includes:

Every security position in the account, each identified as long or short.
A current market value for each position; if a value cannot be determined for a particular holding, the statement must say so.
All account activity during the period, including purchases, sales, dividend payments, interest credits and debits, transfers, securities receipts or deliveries, and journal entries.
The total debit or credit money balance.
An itemized list of all fees or charges applied during the period.
The name and address of the introducing firm and the carrying firm, if different.

Front-Page Disclosures

Supplementary Material .05, effective January 1, 2024, requires certain information to appear clearly and prominently on the front page of every statement:

Identification and customer service contact information for the introducing firm and, if different, the carrying firm. The carrying firm’s name and contact information may appear on the back only if printed in bold or highlighted text.
A disclosure that the carrying firm is a member of SIPC.
Opening and closing balances for the statement period.

Every statement must also carry a notice telling the customer to promptly report any inaccuracy or discrepancy to the firm, and where both an introducing and carrying firm are involved, to report problems to both. The notice must advise customers that any oral complaint should be confirmed in writing to protect their rights, including rights under the Securities Investor Protection Act.²

How Often Statements Go Out

Firms must send a statement at least once each calendar quarter to any customer whose account had a security position, a money balance, or any activity since the last statement. The statement must reflect positions and activity through the end of the reporting period.² Rule 2231 does not require more frequent delivery, though many firms send monthly statements for active accounts. Separate SEC and exchange rules may layer on additional reporting obligations depending on the account and activity.

Exceptions to Quarterly Delivery

DVP/RVP Accounts

Delivery versus payment and receive versus payment accounts, typically used for institutional trades, are exempt from the quarterly requirement only if every one of these conditions is met:

The account is carried solely for execution on a DVP/RVP basis.
All transactions are conducted on a DVP/RVP basis in conformity with FINRA Rule 11860.
The account holds no security or money positions at the end of the quarter.
The customer has consented in writing to waive regular statements, with the consent maintained under Rule 4512 and SEC Rule 17a-4.
The firm will provide any particular statement promptly on request.
The firm will promptly reinstate regular delivery on request.

Miss any one and quarterly statements resume.²

Holding Customer Mail

Under Supplementary Material .04 and FINRA Rule 3150, a firm may hold statements and other mail for a customer who will not be receiving mail at their usual address. The customer must provide written instructions specifying the hold period, and the firm must comply with Rule 3150’s limitations.¹

Court-Appointed Fiduciaries

When a court appoints a guardian, conservator, trustee, or other person with legal authority over the account, the firm may stop sending statements directly to the customer. The fiduciary must provide written instructions and an official copy of the appointment.²

Electronic Delivery

Firms may deliver statements electronically if they comply with SEC standards for electronic delivery. That generally means obtaining the customer’s informed consent, either by manual or electronic signature, before switching from paper.² When transmitting personal financial information electronically, firms must take reasonable precautions to protect the integrity, confidentiality, and security of the data, tailored to the medium used.³

Valuing DPPs and Unlisted REITs

Direct participation programs and unlisted real estate investment trusts do not trade on public exchanges, so their per-share values on account statements matter a great deal. Rule 2231 requires firms to include a per-share estimated value for these securities, developed using a methodology reasonably designed to produce a reliable result.²

Two valuation approaches are acceptable. During the early life of an offering, up to 150 days after the second anniversary of breaking escrow, a firm may report the “net investment” value: offering price minus sales commissions, dealer fees, and estimated organizational expenses as disclosed in the prospectus. At any time, a firm may instead use an appraised value based on annual valuations performed by or confirmed by a third-party valuation expert, using methodology that conforms to standard industry practice.²

Externally Held Assets and Summary Statements

Some firms include assets on the statement that the firm does not actually carry, such as a bank balance or insurance policy value shown as a convenience. The rule permits this but requires clear separation of those assets, along with disclosures that the information is included solely as a courtesy, that the valuation data comes from the customer or an outside source (and the firm is not responsible for its accuracy), and that such assets may not be covered by SIPC.²

When a broker-dealer and other financial service providers jointly deliver their statements alongside a combined summary, Supplementary Material .08 requires the summary to note that it includes assets not held by the broker-dealer, identify each entity and its function, distinguish assets held by each entity, and identify which entities are SIPC members. Each provider included in the summary must have a written agreement attesting that it has procedures for verifying the accuracy of its portion.²

If a logo, trademark, or similar identification of a party other than the introducing or carrying firm appears on the statement, the statement must identify that party and explain its relationship to the firms on the statement. Branding cannot be used in a way that misleads or confuses the customer.²

Sending Statements to Third Parties

Aside from a court-appointed fiduciary, a firm may send statements to someone other than the customer only if the customer has given written instructions. Even then, the firm must continue sending statements to the customer, on paper or electronically. Third-party delivery adds to, rather than replaces, the customer’s copy.²

A separate exception exists for duplicate statements required under other FINRA rules, such as Rule 3210 (accounts held by associated persons at other firms) and Rule 2070 (transactions involving FINRA employees). Those duplicates follow their own rules and do not require additional customer authorization.²

Recordkeeping

Under FINRA Rule 4511, firms must keep customer account statements for at least six years. For records pertaining to an account, the six-year clock starts on the date the account is closed rather than the date the statement was produced.⁴

If You Spot an Error on Your Statement

The rule itself tells you what to do: report the problem to your firm promptly, and confirm any phone conversation in writing. That written record protects your rights under the Securities Investor Protection Act if the issue escalates. FINRA recommends this sequence:

Contact your broker first and ask about any transaction you did not authorize or do not understand.
Escalate to the branch manager or compliance department if the broker’s response is unsatisfactory.
Put the complaint in writing if you lost money or see an unauthorized trade, and keep copies of all correspondence.
File with FINRA if the firm does not resolve the issue. Complaints go through FINRA’s online portal; FINRA no longer accepts complaints by fax.

If a complaint falls outside FINRA’s jurisdiction, FINRA may forward it to the appropriate regulator, which can add time to the process.⁵

1
FINRA. Regulatory Notice 23-02 – FINRA Amends FINRA Rule 2231
2
FINRA. FINRA Rule 2231 – Customer Account Statements
3
FINRA. Electronic Delivery of Information Between Members and Their Customers (NASD Notice to Members 98-3)
4
FINRA. Books and Records
5
FINRA. File a Complaint