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Event Location

Instructor

Instructor: Mark Axelrod
Hours: 9:00 am - 4:30 pm; Registration/Breakfast begins at 8:30 am

This intensive course, formerly offered by Global Investment Operations, will review the details of the Customer Protection Rule 15c3-3 of the SEC.  It will go into detail as to how contents of a customer’s account, portfolio positions and money balances, are required to be protected by the securities industry.  It will also detail how various calculations are preformed on a daily, weekly and monthly basis to ensure this protection.  It will define specifics of what protection means and how it is achieved in the broker/dealer community.

The seminar includes various exercises to ensure the student has a thorough, real-world understanding of the material covered.  The course does not require more than basic math skills.

 Course Outline 

1. Definition of “customer” as it pertains to rule 15c3-3
2. What does the rule mean by “possession or control?”
3. What components of a customer’s account need to be afforded protection and what components do not.  
4. How do we accomplish protection of customer securities as well as customer funds?
5. What if protection of customer assets is not achieved?
6. Examples of how to calculate protection requirements for both portfolio securities and money balances.
7. Review of Reserve Fund Calculation
8. What is a “qualified security?"

 Definitions

·         Customer

·         Fully – Paid Security

·         Margin Security

·         Excess Margin Security

·         Qualified Security

·         Free Credit Balance

 Physical Possession or Control

·         What is P&C?

·         What needs to be in a Broker/Dealers P&C?

·         When does P&C need to be obtained?

·         Exceptions to P&C

 Control of Securities

·         Clearing Corporation

·         Custody of a bank under specific circumstances

·         Special Omnibus Account

·         Items in transfer

·         Foreign Depository

·         Other Bank Depositories

·         Items in transit

·         Other approved locations

 Requirements of P&C

·         Determination made each business day

·         Monthly for inactive margin accounts

·         Time frames for

o        Stock Loan

o        Fail to Receive

o        Bona Short Position

o        Transfer

o        Written Procedures

 Special Reserve Bank Account

• Computation date

• Deposit and Withdrawal Time Frames

• Allowable deposits

• Notification of Banks

• Hindsight Deficiencies

• Exceptions

 Formula Computation

• Purpose of Computation

• Includable - Excludable items

• Stock record allocation

• Components of formula

• PAIB

 Proposed Rule Change

• PAB accounts

• Cash Balance Limitations

• Permitted Deposits

• Definition of Qualified Securities

• Reduction of Aggregate Debit Items

• Seg deficits allocating to proprietary and non-customer locations