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Understanding Gross Revenues from the Securities Business: A Comprehensive Guide

Definition & Meaning

The term gross revenues from the securities business refers to the total income generated by a broker or dealer from various activities related to securities transactions. This includes commissions earned from transactions, fees for executing trades, and income from advisory services, among others. It is important to note that this term excludes certain types of revenues, such as those from the sale of variable annuities or shares of registered investment companies.

Table of content

Legal Use & context

Gross revenues from the securities business are primarily used in the context of securities regulation and financial reporting. This term is relevant in areas such as:

  • Securities law compliance
  • Financial disclosures for brokers and dealers
  • Taxation of income from securities transactions

Individuals and businesses involved in the securities industry may encounter forms or procedures related to this term. Users can utilize legal templates from US Legal Forms to ensure compliance with applicable regulations.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Here are a couple of examples of gross revenues from the securities business:

  • A brokerage firm earns $100,000 in commissions from executing trades for clients, $20,000 from advisory services, and $5,000 from interest on customer accounts. Their gross revenues would total $125,000.
  • A dealer engages in trading activities and realizes a net gain of $50,000 from securities held in their trading account, in addition to earning $10,000 from commissions. Their gross revenues would be $60,000.

Relevant laws & statutes

The main legal reference for gross revenues from the securities business is found in the Securities Investor Protection Act, specifically under 15 USCS § 78lll. This statute outlines the definition and components of gross revenues applicable to brokers and dealers.

Comparison with related terms

Term Definition Difference
Net Revenues Total income after deducting expenses Gross revenues do not account for expenses, while net revenues do.
Commissions Fees earned from executing trades Commissions are part of gross revenues but do not encompass all income sources.

Common misunderstandings

What to do if this term applies to you

If you are involved in the securities business and need to calculate your gross revenues, consider the following steps:

  • Gather all relevant financial records, including transaction statements and commission reports.
  • Use a comprehensive accounting system to track your income from various sources.
  • Consult with a financial advisor or legal professional to ensure compliance with applicable regulations.
  • Explore US Legal Forms for templates that can assist you in documenting your revenues accurately.

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Quick facts

  • Typical Fees: Varies based on services offered.
  • Jurisdiction: Federal and state securities regulations apply.
  • Possible Penalties: Fines for non-compliance with reporting requirements.

Key takeaways

Frequently asked questions

They are the total income a broker or dealer earns from securities-related activities, excluding certain types of income.

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Related legal terms