What an Examiner Wants to See in a Carrying Agreement File

A FINRA examiner sends a document request for carrying agreement samples. The list looks routine: current agreements, amendments, account-level documentation, and proof of supervisory review. The response window closes fast. The relationship history does not.

This is when you see the gap between a complete file and a folder of PDFs. Under FINRA Rule 4311, an agreement sitting in records does not document a carrying arrangement. The firm has to show which version was in effect, who was bound by it, what changed over time, and how the arrangement was supervised after signing.

"Current" means in effect on the date they ask about

The first item on the request is usually the current carrying agreement, and "current" carries heavy weight here. The examiner does not want the original onboarding document if the relationship has changed since then. They need the version governing on that specific date, plus the amendment history showing how the firm arrived there.

Rule 4311 treats that history as a regulatory record, not just a filing habit. The carrying firm submits the agreement to FINRA for approval before it takes effect, and any material change must get approved first too. The rule's own note lists what counts as material: a shift in how responsibilities are split, changes to termination clauses for the introducing firm, terms that affect liability, or even who the parties are. An amendment falling into those categories carries an approval with it—the file has to show that link.

The original agreement, including its approval and signatures.
Each amendment in order, with its own approval and effective date.
The signatures and authorizations for every version.
Evidence that the paper matches how the relationship operates today.

A nuance cuts the other way. A carrying firm may use a standardized form that FINRA has already approved to enter new arrangements without resubmitting each one. That is convenient, but it means the firm's own file is the only place the executed version, its date, and its signatures live. Nobody at FINRA holds a copy of that particular agreement.

The forms are a set, not a stack

Prime brokerage documentation describes one relationship spread across several documents. The SIA-150 is the base prime brokerage agreement. The SIA-151 supplements or amends it. The F1SA, the Form 1 Schedule A, ties specific accounts to the arrangement. Each document answers a different question, and the examiner reads them together.

The question isn't whether each form exists. It's whether they fit together. An F1SA on file against an SIA-150 that is no longer current creates a gap. An SIA-151 that does not reflect the relationship as it runs today becomes a version problem. Storing an amendment apart from the agreement it modifies leaves the reviewer guessing which obligations were in force.

The same reading applies to how the rule requires responsibilities be allocated. A carrying agreement must state which party handles each function: opening and approving accounts, accepting and transmitting orders, executing them, extending credit, receiving and delivering funds and securities, preparing confirmations, maintaining books and records, and monitoring accounts. The examiner reads that allocation and then looks for evidence that the firm operates as the agreement says.

What supervisory evidence looks like

The agreement is just one piece of the file. Examiners also want proof the firm supervised the relationship once it was live, and that evidence takes a recognizable form.

Periodic reviews of the agreement against current practice, with dates and names attached.
Exception reports and reconciliations showing what was done about each exception.
Approvals for every amendment, recorded at the time they happened.
For a new introducing firm: notice to FINRA at least 10 business days before carrying its accounts, plus the due-diligence record behind that decision.
Supervisory sign-off and follow-up on any issue the review found.

This is often the moment firms realize their document management isn't a supervisory workflow. A shared drive stores contracts. It does not show who reviewed them, what was checked against them, when the review occurred, or how exceptions were handled once they appeared.

How files come apart

Agreement files are rarely lost all at once. They fragment slowly instead. An amendment arrives by email. A revised form gets saved under a new filename. An account is added. A counterparty changes its role. A reviewer completes the annual check and logs the result in a separate spreadsheet. After a few years, the firm has no single record of how those pieces relate to each other.

That is the problem an examiner exposes. Firms may find every document eventually. The question is whether they can establish the relationship quickly and with confidence, under a deadline. A regulatory response should not depend on which employee remembers the naming convention from three years ago.

PBIN keeps the carrying agreement record in one place: versions, amendments, approvals, and reviews

Where PBIN fits

Prime Broker Interactive Network (PBIN) holds all prime brokerage agreements for a relationship in one shared location. Executing brokers, clearing firms, and prime brokers access the same files there. The system tracks each agreement from submission through execution, amendment, and renewal. It shows current status to every participant, sends alerts for expirations or pending approvals, and keeps the full history with timestamps and attribution on every change.

That changes what an exam response looks like. Instead of searching shared drives and inboxes, your firm identifies the relationship, confirms the version in effect, traces the amendments and their approvals, and produces the review record from one system. The record is assembled as the work happens, not after the request lands.

The cost of an incomplete file

An incomplete carrying agreement file first costs operations: hours locating documents, comparing versions, and working out which form governed on a given date. Then the burden moves to compliance, legal, and senior management, where someone has to explain why the amendment history has a hole in it, why an account-level form was filed on its own, or why the supervisory review cannot be found.

The firm may have followed its process. But if it can't show that process in a coherent record, defending it becomes difficult—and an examiner will ask tougher follow-up questions.

Where to start

If your prime brokerage agreements sit in shared drives, email threads, or disconnected PDF folders, fix the record first. The solution is one place where the version in effect, amendments, approvals, and reviews are captured as they happen. Contact Loffa Interactive Group to walk through a carrying agreement file like an examiner would, and see what PBIN holds at each step.