BROKER-DEALER -

Change to the No-Action Relief Regarding Definition of “Ready Market” With Regard to Foreign Equity Securities Pursuant to SEC Rule 15c3-1(c)(11)(i) -

On February 9, the Securities and Exchange Commission withdrew a no-action letter that was issued on November 28, 2012 (Old Letter), and issued a new one in its place (New Letter). The New Letter is identical to the Old Letter except that it: (1) expands the equity securities of a foreign issuer that may be treated as having a “ready market” from ones that are listed on the FTSE World Index to securities listed for trading on a foreign securities exchange located within a country that is recognized on the FTSE World Index if they have been trading for at least 90 days; and (2) it alters footnote 5. Per the New Letter, the SEC is continuing to grant no-action relief, stating that it will not recommend enforcement action if a broker-dealer treats an equity security of a foreign issuer as having a ready market under paragraph (c)(11) of the Net Capital Rule (and subject to the haircuts under paragraph (c)(2)(vi)(J)), if the following conditions are met...