FINRA provided guidance on cost-sharing agreements in a communication to members published in October 2003. This communication requires brokers to “establish a data set that reflects all expenses incurred for their business and any corresponding liability, whether a third party has agreed to bear the costs or liability.” 03-63 also emphasizes the broker`s obligation to keep records of these expenses or liabilities assumed by third parties, regardless of accounting treatment or the impact on net capital. In addition, the Notice of Market specifies that these charges and debts that the third party assumes must be considered as the broker`s debts for net capital purposes, unless this amended and amended expense allocation agreement (“completed agreement”) between G.research, LLC (formerly Gabelli-Company, Inc.) as of November 23, 2016. Gabelli – Company Investment Advisers, Inc. (“GCIA”) (formerly Gabelli Securities, Inc.), a Delaware-based company based in Rye, New York, that acts as a payer for certain wage costs. A fee note agreement allows two or more dentists to work side by side in a practice and share expenses such as rent, electricity bills, common appliance costs and staff salaries. This can offer a lot of flexibility and has many advantages, financial and other. However, it is important to set clear limits on patient lists and personal assets. With respect to net capital issuance, 03-63 notes that third-party charges and liabilities must be debts to the broker-dealer for net capital purposes, unless cost-sharing agreements between brokers and third parties are a hot topic for FINRA and the SEC. Businesses and their FINOP should fully understand the communication guidelines to members 03-63.
The independence of having one`s own practice, but reducing half the costs, is a very tempting idea. However, it is absolutely necessary that every aspect of the practice be truly taken into account and that this agreement be then recorded in a tailored agreement drawn up by those developed with the dental industry and the issues that need to be addressed, thus avoiding the nightmarish scenarios that can arise if there is no written agreement. This greatly increases the likelihood that the practice will work smoothly and successfully for all parties involved. In general, brokers and their FINOPs should be aware of the basic principles and retention requirements of cost-sharing agreements. The entity must execute the cost-allocation agreement, clearly document the reasons for the cost allocation and review the agreement on a regular basis. The entity should update the agreement if necessary. FINRA and SEC guidelines and rules provide a clear path for broker brokers to monitor the execution and implementation of cost-sharing agreements with third parties. The basic steps in preparing for audits or regulatory controls include: At Else Solicitors, we have a long-standing relationship with health care and dentistry in particular, and we have experience advising on fee billing agreements. The terms of these agreements can vary considerably and have many characteristics similar to those of partnership agreements. An environment with several professionals who each have their own plans and obligations does not always help to ensure the proper functioning of the practice.
Indeed, if there is no general agreement on how the practice should be conducted, it can easily be a recipe for a dispute somewhere on the line. In October 2003, FINRA (then NASD) issued guidelines on cost-sharing agreements for its member companies in Communication to Members (“””” 03-63. The main driver behind 03-63 was the regulators` concern that brokers are not properly accounting for expenses and liabilities in their financial statements, a concern that still exists today.