To determine its net capital, a broker-dealer must make a number of adjustments to its net worth as calculated in accordance with generally accepted accounting principles ( GAAP). The Net Capital Rule is designed to ensure that broker-dealers maintain adequate liquidity to meet their obligations. This change should make it easier for broker-dealers to offer cash sweep programs to their customers while continuing to adhere to the requirements of the Net Capital Rule. On March 30, 2020, the Securities and Exchange Commission ( SEC) issued a no-action letter stating that the staff of the SEC’s Division of Trading and Markets would not recommend enforcement actions against broker-dealers that treat unsecured receivables related to bank sweep accounts as an allowable asset that is not deducted from net worth under Rule 15c3-1 (the “ Net Capital Rule”).
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