In addition, the regulator said at the time that it would conduct a sweep of broker-dealers regarding their compliance with the Customer Protection Rule broken by Merrill, Rule 15c3-3
By contrast, in the United States, Rule 15c3-3
limits a broker-dealer from using its customer's securities to finance its proprietary activities.
and Rule 15C3-3 and (ii) $507 million in assets posted by LBI as margin
LBI's reserve calculation for purposes of Rule 15C3-3." Id.
(10) This amount is a function of both clients' "net equity"' as per SEC rule 15c3-3
, and is not accessible to the dealer as a source of funding for other activities.
Specifically, these broker/dealers are subject to full compliance with SEC Rule 15c3-3, often called the Customer Protection Rule.
In the PCAOB's "Second Report on the Progress of the Interim Inspection Program Related to Audits of Broker and Dealers," of the 4,227 broker/dealers audited, only 311 were subject to SEC Rule 15c3-3; the remaining broker/dealers claimed an exemption (Aug.
Affirm the obligation of banks and other custodians to safeguard Rule 15c3-3
accounts and to reaffirm that such accounts are subject to trustee control upon broker-dealer liquidation.
systems (Rule 15c3-3
), recordkeeping obligations (Rule 17a-3(a)(10)),
The order will permit FINRA members to hold customer funds for up to 7 days while complying with the new principal review requirements without the firms becoming fully subject to Exchange Act Rule 15c3-3
. Firms that hold customer funds longer than 7 days while conducting suitability reviews must maintain higher levels of net capital, officials say.
Under the Securities Exchange Act of 1934, Rule 15c3-3
requires that brokers "maintain physical possession or control" over customers' securities.
Since the securities industry is heavily regulated, the guide provides an overview of numerous regulatory considerations, primarily those of the SEC, including net capital requirements under Rule 15c3-1, customer protection rules under Rule 15c3-3
, and reporting requirements under Rule 17a-5.