SEC Division of Trading and Markets no-action letter: eToro USA Securities Inc.

September 17, 2026
Mr. Raymond Lombardo
Acting Associate Director
Division of Trading and Markets
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Request for No Action Letter – Zero Cash Balance Brokerage Offerings Dear Mr. Lombardo:
We are writing on behalf of eToro USA Securities Inc. (the “Firm”) which, in addition to its traditional brokerage account offering, seeks to operate a “zero cash balance” brokerage account model, whereby its customers elect to (1) deposit and maintain fundsin separate accounts maintained by a bank orstate licensed money services business that is registered with the Financial Crimes Enforcement Network (the “MSB”), (2) transfer funds from the customer’s account at the MSB to the Firm’s carrying broker-dealer (the “Carrying Firm”) to satisfy securities buy orders, and (3) transfer cash proceeds from securities sales from the Carrying Firm to the customer’s account at the MSB. We respectfully request assurance that the staff of the Division of Trading and Markets (the “Staff”) will not recommend enforcement action to the U.S. Securities and Exchange Commission (the “Commission”) under section 15(c)(3) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) or Rule 15c3-1 thereunder if, under the circumstances described herein, the Firm adopts a “zero cash balance” brokerage account model and were to operate with a minimum dollar net capital requirement of $5,000 pursuant to Exchange Act Rule 15c3-1(a)(2)(vi). Firm Business Model; Role of Introducing Firm, Carrying Firm, and MSB The Firm’s “zero cash balance” brokerage account model operates broadly as follows:

1. The Firm introduces “zero cash balance” brokerage accounts (each, a “Brokerage Account”) to the
   Carrying Firm on a fully disclosed basis. As a condition to entering into an agreement with the financial technology provider that operates the Brokerage Account, customers are required to open an account with the MSB (each, an “MSB Account”).
2. Customers do not directly fund or otherwise maintain funds within their Brokerage Accounts.
   Instead, customers deposit and maintain funds within their MSB Accounts. When customers place a securities buy order through their Brokerage Account, they provide a corresponding instruction Ethan L. Silver Partner 1251 Avenue of the Americas New York, New York 10020 T: (212) 419-5862 F: (973) 597-2400 E: esilver@lowenstein.com

Page 2 September 17, 2026
to the MSB to transfer necessary funds from their MSB Account to their Brokerage Account. When customers sell a securities position out of their Brokerage Account, they provide a corresponding instruction to the Carrying Firm to transfer the sales proceeds from the Carrying Firm to their MSB Account. Example Securities Purchase Transaction Flow: Customer places a buy order with the Firm for 1 share of ABC stock (“ABC”) at a price of $100. In conjunction with the delivery of the buy order to the Firm, the customer also delivers an instruction to the MSB to transfer $100 from their MSB Account to their Brokerage Account held with the Carrying Firm. The MSB transfers $100 to the Carrying Firm. Upon receipt, the Carrying Firm allocates the $100 to the customer’s Brokerage Account. On T+1 the ABC buy order settles and 1 share of ABC is allocated to the customer’s Brokerage Account. Example Securities Sale Transaction Flow: Customer holds 1 share of ABC in their Brokerage Account. Customer places a sell order with the Firm for 1 share of ABC. In conjunction with the delivery of each sell order, the customer also delivers an instruction to transfer the sale proceeds to the customer’s MSB Account and the Firm relays the customer’s instruction to the Carrying Firm. On T+1 the sell order settles and $100 is credited to the customer’s Brokerage Account. The Carrying Firm then promptly transfers the $100 to the customer’s MSB Account. Details concerning the Firm’s brokerage operations with regard to all customers:

1. The Firm does not receive, directly or indirectly, or hold funds or securities for, or owe funds or
   securities to, customers and does not carry accounts of, or for, customers and does not engage in any of the activities described in paragraphs (a)(2)(i) through (v) of Rule 15c3-1;
2. The Firm operates as an introducing broker-dealer and clears all transactions with and for customers
   on a fully disclosed basis with the Carrying Firm;
3. The Carrying Firm carries all of the Brokerage Accounts of the Firm’s customers and makes and
   keeps current and preserves such books and records pertaining thereto pursuant to the requirements of Rules 17a-3 and 17a-4, as are customarily made and kept by a clearing broker or dealer; Additional details regarding the operation of the Firm’s “zero cash balance” brokerage account model:
4. Each customer of the Firm, under the terms of their brokerage account agreement with the Firm
   and their brokerage account agreement with the Carrying Broker (the “Brokerage Customer Agreements”), designates a third-party account such as a bank account or their MSB Account (such account, the “External Cash Account”), to (a) serve as the funding source for any transfer of funds into the customer’s Brokerage Account introduced by the Firm and held at the Carrying Firm, and (b) serve as the designated destination account for any transfers of funds out of the customer’s Brokerage Account;
5. The terms of the Brokerage Customer Agreements clearly disclose and specify that pursuant to the
   customer's specific consent, instruction, and standing authorization, all free credit balances in the customer’s Brokerage Account will be promptly remitted by the Carrying Firm to the customer’s External Cash Account;
6. The terms of the Brokerage Customer Agreements clearly disclose that all funds transferred by the
   Carrying Firm to the customer’s External Cash Account are not held in the customer’s Brokerage Account and therefore not recognized as eligible claims of “customers” under the Securities

Page 3 September 17, 2026
Investor Protection Act of 1970 (“SIPA”), rendering such funds ineligible for protection under SIPA and the Securities Investor Protection Corporation;
4. Funds held in any External Cash Account will not be commingled with proprietary funds of the
MSB and the Firm will conduct periodic checks to ensure the MSB maintains appropriate licensure and registration necessary to facilitate its activities described herein; and
5. Important details regarding the operation of the “zero cash balance” brokerage account model (e.g.,
relevant information consistent with the points identified in items 1 – 3 immediately above) will be prominently disclosed to customers, including within Brokerage Customer Agreements and at pertinent points within the Firm’s brokerage platform. Conclusion Based upon the foregoing, we request assurance that the Staff would not recommend enforcement action to the Commission against the Firm for violating section 15(c)(3) of the Exchange Act or Rule 15c3-1(a) thereunder if it operates in accordance with the description above while maintaining a minimum net capital of the greater of $5,000 or the amount required under paragraph (a)(1) of Rule 15c3-1.

---

We appreciate your attention to this request. Please do not hesitate to contact me if you have any questions or require further information. Sincerely, Ethan L. Silver