What is the 15c3 rule?
Asked by: Jaden Nicolas | Last update: June 5, 2025Score: 4.6/5 (27 votes)
The Securities and Exchange Commission today adopted amendments to Rule 15c3-3 (the customer protection rule) to require certain broker-dealers to increase the frequency with which they perform computations of the net cash they owe to customers and other broker-dealers (known as PAB account holders) from weekly to ...
What is the 15c3 requirement?
Rule 15c3-3 requires. broker-dealers to determine, each business day, the number of customer. fully paid and excess margin securities in their possession or control and. the number of fully paid and excess margin securities that are not in the. broker-dealer's possession or control.
What is the rule 15c3-3 exemption?
(3) Upon written application by a broker or dealer, the Commission may exempt such broker or dealer from the provisions of this section, either unconditionally or on specified terms and conditions, if the Commission finds that the broker or dealer has established safeguards for the protection of funds and securities of ...
What is the purpose of Rule 15c3 1?
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.
Who is considered a customer for the 15c3-3 customer protection rule?
8 Subparagraph (a)(1) of Rule 15c3-3 defines the term "customer." Generally, a customer is any person from whom or on whose behalf the broker-dealer has received or acquired securities for such person's securities account.
SEC Customer Protection Rule 15c3-3 Explained - NYIF
What are the requirements for 15c3 5?
Exchange Act Rule 15c3-5 (Market Access Rule) requires firms with market access or that provide market access to their customers to “appropriately control the risks associated with market access so as not to jeopardize their own financial condition, that of other market participants, the integrity of trading on the ...
What is the customer protection rule?
Regulatory Obligations
Exchange Act Rule 15c3-3 (Customer Protection Rule) imposes requirements on member firms that are designed to protect customer funds and securities.
What is Rule 15c3 3a?
15c3-3a(Note E)(1) Debit balances in margin accounts must be reduced by the amount by which a specific security (other than an exempted security) which is collateral for margin accounts exceeds in aggregate value 15 percent of the aggregate value of all securities which collateralize all margin accounts receivable; ...
What is the SEC Rule 15C?
(c) Section 15C(a)(1)(B)(i) of the Act (15 U.S.C. 78o–5(a)(1)(B)(i)) requires all government securities brokers or deal- ers that are also registered brokers or dealers to notify the Commission of their status as government securities brokers or dealers.
What is SEC Rule 15c3 3 Rehypothecation?
In the US, Federal Reserve Regulation T and SEC Rule 15c3-3 limit the amount of a client's assets which a prime broker may rehypothecate to the equivalent of 140% of the client's net liability to the prime broker. In many other markets, there are no such limits.
What is 15c3-3 money?
Rule 15c3-3 plays a key role in advancing the Commission's investor protection mandate. It requires broker-dealers to safeguard customer assets, which helps to ensure that, should a broker-dealer fail, it can self-liquidate in an orderly manner that protects its customers' ability to access her assets.
What is the K-2 I exemption under SEC rule 15c3-3?
SEC Rule 15c3-3 & Exemptions for Broker Dealers
(k)(2)(i) – This exemption applies to broker dealer firms that do not carry margin accounts and promptly transmit all customer funds received.
What is the custody rule for broker-dealers?
The rule requires advisers that have custody of client securities or funds to implement a set of controls designed to protect those client assets from being lost, misused, misappropriated or subject to the advisers' financial reverses.
What is the market maker 1% rule?
market maker must, within 10 business days of the end of each calendar quarter, compute its trading volume for each subject security, and if the volume exceeds 1 percent, the mar- ket maker must begin publishing two-sided quotations.
What is the minimum net capital for a prime broker?
A Prime Broker is required to maintain a minimum regulatory net capital of $1.5 million. A prime brokerage is a bundled group of services that investment banks and other financial institutions offer to hedge funds and other large investment clients.
What is the 15c3 3 daily computation?
SEC Rule 15c3-3 was amended to add new subsection (e)(3)(i)(B)(1) to require that any broker-dealer with “average total credits” equal to or greater than $500 million must compute its reserve daily (and must make any necessary reserve deposit by 10 a.m. local time on the second following business day after the required ...
What is the 15c3 5 rule?
Exchange Act Rule 15c3-5 (Market Access Rule) requires broker-dealers with market access or that provide market access to their customers to “appropriately control the risks associated with market access so as not to jeopardize their own financial condition, that of other market participants, the integrity of trading ...
What is the 15c process?
This is called the 15(c) process, named after the section of the Investment Company Act of 1940 (1940 Act) that requires a majority of a fund's independent directors to annually approve the fund's advisory contract at an in-person meeting called for that purpose.
What is the rule 15c relation back?
Rule 15(c) is amplified to state more clearly when an amendment of a pleading changing the party against whom a claim is asserted (including an amendment to correct a misnomer or misdescription of a defendant) shall “relate back” to the date of the original pleading.
What is 15c3 lockup?
Securities and Exchange Commission (SEC) Rule 15c3-3 requires brokerage firms to maintain secure accounts. Also known as the Customer Protection Rule, SEC Rule 15c3-3 is part of the Code of Federal Regulations. It ensures that brokerage clients can withdraw assets at any time, and a brokerage has to work to uphold it.
What is the 140% margin rule?
The relationship between the bank and the broker-dealer is governed by Regulation U, which allows the broker-dealer to rehypothecate securities up to 140% of the customer's loan to the bank.
What is the 17a 13 rule?
17a-13(d) The examination, count, verification, and comparison shall be made or supervised by persons whose regular duties do not require them to have direct responsibility for the proper care and protection of the securities or the making or preservation of the subject records.
What are 3 consumer protection laws?
Select federal consumer protection statutes, which apply nationwide, include the Federal Trade Commission Act (“FTC Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Gramm-Leach-Bliley Act (“GLB Act”), the Truth in Lending Act (“TILA”), the Fair Credit Reporting Act (“FCRA”), ...
What is Rule 611 Order Protection Rule?
The Order Protection Rule requires trading centers to establish and enforce procedures designed to prevent "trade-throughs"—trade executions at prices inferior to the best-priced quotes displayed by automated trading centers. The Order Protection Rule is not an outright prohibition on trade-throughs.
What is the main rule of customer service?
Respect Your Customers
Treat your customers as valued members of your community. Your customers are humans with feelings, not just credit card numbers. Listen to them when they speak, take the time to read and respond to their feedback online, and treat their concerns seriously.