Broker Dealers Customer Protection Rule

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Overview

Adopted in 1972, SEC Rule 15c3-3 provides regulatory safeguards regarding the custody and use of customer securities and free credit balances held by broker-dealers. The rule, with limited exceptions, requires compliance by all registered broker-dealers. The purpose of Rule 15c3-3 is to protect customer funds and securities held by the broker-dealer. SEC Rule 15c3-3 is composed of two distinct parts. Part 1 deals with the maintenance of the physical possession or control of all fully paid and excess margin customer securities. The second part requires broker-dealers to segregate all customer cash or money obtained from the use of customer property that has not been used to finance transactions of other customers. Our solution deals primarily with the second part of the rule. It is designed to provide a fundamental rule based allocation and calculation that will greatly assist the Broker Dealer in determining what amount of cash and securities must be ‘locked up’ for the benefit of its customers. We also provide for the adjustment of the reserve formula to reflect references from the possession and control section of the rule.

Key Benefits

  • Efficient capital usage enforced through direct use of the SEC’s allocation methodology
  • Flexibility for clients to override the solution’s standard allocation with proprietary allocation, by specifying preferred sequence using an alternate data table
  • The AxiomSL solution sits on top of existing data sources as an additional layer, and is agnostic to security master/general ledger type, thus lowering the time to implement the solution
  • Production of the FINRA specified AEP files comprising stock record, chart of accounts, allocation categories, allocation hierarchy, allocation category summary, allocation pair-off summary, and security allocation details
  • Workflow Integration: The ability to run calculations with one click or using client’s proprietary scheduler

Media

Brochures

Product/Service details