Net Capital

The fourth Series 27 chapter is the heart of the exam for many candidates. Net capital questions test whether the FINOP can classify firm type, identify minimum requirements, evaluate aggregate indebtedness, remove nonallowable assets, apply deductions and haircuts, and determine whether the firm remains compliant on a moment-to-moment basis. The math matters, but the logic behind the math matters even more.

Read this chapter in the same order the firm would analyze its financial condition. Start with the required minimum, then determine aggregate indebtedness, review the asset side of the balance sheet, make net-worth adjustments and other deductions, apply the right haircut treatment, and finish with the overall net-capital computation and any resulting notice or curtailment implications.

In this section

• Minimum Net Capital and Aggregate Indebtedness
  Review how Series 27 determines firm category, minimum capital standards, and aggregate-indebtedness treatment.
• Allowable Assets, Net Worth Adjustments, and Other Deductions
  Learn how Series 27 removes nonallowable assets, adjusts net worth, and applies operational deductions before final net capital.
• Haircuts and Product Treatment
  Review how Series 27 applies security haircuts, concentration charges, ready-market rules, and product-specific treatment.
• Net Capital Compliance and Business Curtailment
  Learn how Series 27 ties final net-capital results to withdrawals, notice rules, consolidations, and business-curtailment decisions.