What is a 15c3-3?
For customer cash, Rule 15c3-3(e) requires a broker-dealer to maintain a reserve of funds or qualified securities in an account at a bank that is at least equal in value to the net cash owed to customers.
What is 15c3 calculation?
Rule 15c3-3 requires a broker-dealer to calculate what amount, if any, it must deposit on behalf of customers in the reserve bank account, entitled “Special Reserve Bank Account for the Exclusive Benefit of Customers” (“Reserve Bank Account”), under the formula set forth in Rule 15c3-3a (“Reserve Formula”).
What is the K 2 )( i exemption?
SEC Rule 15c3-3(k)(2)(i) provides an exemption from the requirements of SEC Rule 15c3-3 in respect of securities transactions of customers where the broker-dealer carries no margin accounts, promptly transmits all customers funds and delivers all securities received in connection with its activities as a broker-dealer.
What is the SEC customer protection rule?
The Customer Protection Rule requires registered broker-dealers to safeguard the investment assets of their customers. The rule is designed to protect those customers from monetary losses and delays that can occur when that firm fails.
What is the net capital requirements for broker-dealers?
A broker or dealer (other than one described in paragraphs (a)(2)(ii) or (a)(8) of this section) shall maintain net capital of not less than $250,000 if it carries customer or broker or dealer accounts and receives or holds funds or securities for those persons.
What is exemption report?
Exemption Report means the report (in the form report set out at Appendix 2 (Exemption Report)) to be completed when an Exemption is requested. Sample 1. Sample 2. Sample 3. Exemption Report means an application for Exemption in the form set out in Appendix 4 below and signed by the Director of Corporate Services.
Which of the following statements is true about the SEC customer protection rule?
Which of the following statements is TRUE about the SEC Customer Protection Rule? If a client sells securities and fails to deliver them within 10 business days of the settlement date, the broker-dealer must buy-in the customer.
How is net capital calculated?
Net capital is an organization’s net worth, commonly calculated by total assets minus total liabilities. A variation on this formula is to deduct assets not easily converted to cash, such as notes receivable or inventory.
What are net capital rules?
Exchange Act Rule 15c3-1 (Net Capital Rule) requires that firms must at all times have and maintain net capital at specific levels to protect customers and creditors from monetary losses that can occur when firms fail.