Regulatory Alerts2006-05-24
Instructions of Criteria for Solvency of Brokerage Companies Operating on the Stock Exchange
Issued by the Stock Exchange Executive Committee in 1995, these instructions establish mandatory solvency standards for brokerage firms operating on the exchange. The regulations cap customer credit and payable balances at 200 percent of owners' equity, limit total commitments to 250 percent, and require brokers to maintain liquid assets covering short-term obligations by at least 100 percent. Brokerage companies must accurately value securities portfolios, maintain adjusted equity at least 25 percent of prior annual expenses, and submit audited annual or semi-annual reports alongside weekly and monthly financial statements by specified deadlines.
Share