A BC brokerage's trust account holds $125,000, but its trust ledgers show $130,000 owed to clients. What must the brokerage do?
Correct Answer
B) Take immediate steps to eliminate the $5,000 shortfall
Rules s. 73(2) requires a brokerage to take immediate steps to eliminate a negative balance in its trust records, and BCFSA's trust guideline says a negative balance must be resolved immediately. Under s. 73(3) the superintendent must be notified immediately if a managing broker thinks a compensable loss may result, and otherwise within 10 days if the $5,000 shortfall has not been eliminated by then.
Why This Is the Correct Answer
This answer is correct. Section 73(2) requires immediate steps to eliminate the shortfall; notice to the superintendent then follows the timing in s. 73(3).
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