Amendments to Financial Responsibility Rules for Broker-Dealers Impact Net Capital


On July 31, 2013, the Securities and Exchange Commission (SEC) announced amendments to Financial Responsibility Rules for Broker-Dealers (Release No. 34-70072; File No. S7-08-07). The rule amendments become effective October 21, 2013 and impact the net capital rule, customer protection, books and records, and notification rules for broker-dealers. The three key amendments to the Net Capital Rule now require deductions from net worth for liabilities or expenses assumed by third parties; deductions from net worth for non-permanent capital contributions; and deductions for excess fidelity bonds as established by an SRO.

Courtesy of the LeGaye Law Firm

Michael Schaps, Co-Author

Daniel E. LeGaye, Co-Author

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