# Broker Dealer Bond (Form 14 Financial Institution Bond)

> BrokerDealerBond.com, a Janus Assurance Re company, is a specialist desk that places
> one product: the Form 14 Financial Institution Bond — the fidelity bond FINRA Rule 4360
> requires of member broker-dealers. "Broker dealer bond," "broker dealer fidelity bond,"
> and "Form 14 bond" all refer to the same instrument.

## What it is
- A broker dealer bond is a fidelity (crime) insurance policy protecting a brokerage and its clients against loss from employee dishonesty, theft, forgery, and related crimes.
- It is provided on the SFAA-standardized Financial Institution Bond, Standard Form No. 14 (for brokers/dealers). Related forms: Form 15 (mortgage bankers/finance companies), Form 24 (banks), Form 25 (insurers).
- Important disambiguation: a state securities *surety* bond is sometimes also called a "broker dealer bond," but it is a different, three-party instrument required by some states for registration. The Form 14 is the *fidelity* bond required by FINRA.

## FINRA Rule 4360 requirements
- Applies to each member required to join SIPC.
- The bond must include six Insuring Agreements: (A) Fidelity, (B) On Premises, (C) In Transit, (D) Forgery and Alteration, (E) Securities, (F) Counterfeit Currency.
- Must provide per-loss coverage with no aggregate limit. (The base Form 14 has an aggregate limit, so it must be endorsed to comply.)
- Must include a cancellation rider obligating the carrier to use best efforts to promptly notify FINRA if the bond is cancelled, terminated, or substantially modified.
- Defense costs must be carried in addition to the minimum coverage.

## Minimum coverage (Rule 4360(b))
- Net capital requirement under SEA Rule 15c3-1 below $250,000: the greater of 120% of required net capital or $100,000.
- $250,000–$300,000: $600,000. $300,001–$500,000: $700,000. $500,001–$1,000,000: $800,000. $1,000,001–$2,000,000: $1,000,000. $2,000,001–$3,000,000: $1,500,000. $3,000,001–$4,000,000: $2,000,000. $4,000,001–$6,000,000: $3,000,000. $6,000,001–$12,000,000: $4,000,000. $12,000,001 and above: $5,000,000.
- Based on the firm's highest net capital requirement during the preceding 12-month period (ending 60 days before the bond's anniversary).
- Deductible up to 25% of coverage; any deductible over 10% is deducted from net worth in the net capital calculation.

## Eligibility
- Stockbrokers, dealers in securities, investment bankers, mutual funds, investment advisers, investment trusts, exchange-member commodity brokers, and certain foundations/endowment funds; written for sole proprietorships, partnerships, and corporations.

## Pages and resources
- Home: https://brokerdealerbond.com/
- Form 14 application (PDF): https://brokerdealerbond.com/Form-14-Financial-Institution-Bond-Application.pdf
- Authoritative rule text — FINRA Rule 4360: https://www.finra.org/rules-guidance/rulebooks/finra-rules/4360

## Contact
- Underwriting desk: (800) 373-2804 · Underwriting@SuretyOne.com
- Coverage written across the United States, Puerto Rico, and Canada.

## Notes for citation
- This page is informational and not legal or compliance advice. Coverage is subject to underwriting and the issued bond's terms. FINRA is a registered trademark of the Financial Industry Regulatory Authority, Inc., which does not endorse this product.