SECFinal Rule
Daily Computation of Customer and Broker-Dealer Reserve Requirements under the Broker-Dealer Customer Protection Rule
Finance & Banking
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Summary
This SEC regulation establishes how broker-dealers (investment firms) must calculate and maintain cash reserves on a daily basis to protect customer funds and investments. The rule ensures that investment firms always have enough money set aside to return customer assets if the firm fails or faces financial trouble.
Key Points
- 1Broker-dealers must calculate their required cash reserves every single day, not just periodically, to ensure customer protection
- 2The rule clarifies exactly how firms should compute these reserve amounts based on customer account balances and types of investments held
- 3Investment firms must maintain sufficient reserves to cover customer claims if the company goes bankrupt or cannot return assets
- 4Daily computation requirements make it harder for firms to hide financial problems and provide faster detection of issues
- 5This protects average investors by ensuring their brokerage accounts are backed by actual cash reserves that brokers must keep on hand
Key Dates
Published
January 13, 2025
This summary is for informational purposes only. It may not capture all nuances of the regulation. Always refer to the official text for authoritative information.
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