Investment Operations

SEC Customer Protection Rule 15c3-3

Categories Compliance, Operations

Course Instructor

Course Level

Intermediate

Certification

Certificate

Delivery

Via Zoom

Hours (EST)

1:00pm - 5:00pm​

Description

*This course can be offered upon request and can be customized to fit your team’s needs.

Related Course: SEC Net Capital Rule 15c3-1

Date: TBD

This half-day virtual training course will review the details of the SEC Customer Protection Rule 15c3-3. It will explain in detail how contents of a customer’s and PAB account, portfolio positions and money balances, are required to be protected by the securities industry. It will also detail how various calculations are performed on a daily, weekly and monthly basis to ensure this protection. It will define specifics of what protection means and how it is achieved in the broker-dealer community. The SEC Customer Protection Rule 15c3-3 training seminar includes numerous exercises to ensure the student has a thorough, real-world understanding of the material covered. The course does not require more than basic math skills. Prerequisites: None

Agenda

Overview of Rules of Financial Responsibilities of Brokers and Dealers

  1. Origins of the Customer Protection Rule
  2. Definition of customer, non-customer and PAB as it pertains to rule 15c3-3
  3. What does the rule mean by “possession or control?”
  4. What components of a customer’s account need to be afforded protection and what components do not.
  5. How do we accomplish the protection of customer and PAB securities and funds?
  6. What if the protection of customer and PAB assets is not achieved?
  7. Examples of how to calculate protection requirements
  8. Review of Reserve Fund Calculation
  9. Customer and PAB
  10. Review of PAB Calculation

Definitions 

  1. Customer / Non-Customer / PAB
  2. Qualified Security
  3. Fully-Paid Security
  4. Margin Security
  5. Excess Margin Security
  6. Free Credit Balance

Physical Possession or Control

  1. What is Possession or Control?
  2. What needs to be in a Broker-Dealer’s Possession or Control?
  3. When does Possession or Control need to be obtained?
  4. How do broker-dealers accomplish possession or control?
  5. Exceptions to Possession or Control

Control of Securities

  1. Clearing Corporation
  2. Custody of a bank under specific circumstances
  3. Special Omnibus Account Items in transfer
  4. Foreign Depository
  5. Other Bank Depositories
  6. Items in transit
  7. Other approved locations

Requirements of P&C

  1. The determination is made each business day
  2. Monthly for inactive margin accounts
  3. Time frames for
  4. Stock Loan
  5. Fail to Receive
  6. Bona Short Position
  7. Transfer
  8. Written Procedures
  9. Accomplishing possession or control
  10. Notification to PAB account holders

Special Reserve Bank Account

  1. Computation date
  2. Deposit and Withdrawal Time Frames
  3. Allowable deposits
  4. Deposit Limitations
  5. Notification of Banks

Formula Computation

  1. Purpose of Computation
  2. Includable
  3. Excludable items
  4. Stock record allocation
  5. Components of formula
  6. Hindsight Deficiencies
  7. PAB Computation

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2023 Training Calendar

Training Catalogue

Course Instructor

Course Level

Intermediate

Certification

Certificate

Delivery

Via Zoom

Hours (EST)

1:00pm - 5:00pm​

Description

*This course can be offered upon request and can be customized to fit your team’s needs.

Related Course: SEC Net Capital Rule 15c3-1

Date: TBD

This half-day virtual training course will review the details of the SEC Customer Protection Rule 15c3-3. It will explain in detail how contents of a customer’s and PAB account, portfolio positions and money balances, are required to be protected by the securities industry. It will also detail how various calculations are performed on a daily, weekly and monthly basis to ensure this protection. It will define specifics of what protection means and how it is achieved in the broker-dealer community. The SEC Customer Protection Rule 15c3-3 training seminar includes numerous exercises to ensure the student has a thorough, real-world understanding of the material covered. The course does not require more than basic math skills. Prerequisites: None

Agenda

Overview of Rules of Financial Responsibilities of Brokers and Dealers

  1. Origins of the Customer Protection Rule
  2. Definition of customer, non-customer and PAB as it pertains to rule 15c3-3
  3. What does the rule mean by “possession or control?”
  4. What components of a customer’s account need to be afforded protection and what components do not.
  5. How do we accomplish the protection of customer and PAB securities and funds?
  6. What if the protection of customer and PAB assets is not achieved?
  7. Examples of how to calculate protection requirements
  8. Review of Reserve Fund Calculation
  9. Customer and PAB
  10. Review of PAB Calculation

Definitions 

  1. Customer / Non-Customer / PAB
  2. Qualified Security
  3. Fully-Paid Security
  4. Margin Security
  5. Excess Margin Security
  6. Free Credit Balance

Physical Possession or Control

  1. What is Possession or Control?
  2. What needs to be in a Broker-Dealer’s Possession or Control?
  3. When does Possession or Control need to be obtained?
  4. How do broker-dealers accomplish possession or control?
  5. Exceptions to Possession or Control

Control of Securities

  1. Clearing Corporation
  2. Custody of a bank under specific circumstances
  3. Special Omnibus Account Items in transfer
  4. Foreign Depository
  5. Other Bank Depositories
  6. Items in transit
  7. Other approved locations

Requirements of P&C

  1. The determination is made each business day
  2. Monthly for inactive margin accounts
  3. Time frames for
  4. Stock Loan
  5. Fail to Receive
  6. Bona Short Position
  7. Transfer
  8. Written Procedures
  9. Accomplishing possession or control
  10. Notification to PAB account holders

Special Reserve Bank Account

  1. Computation date
  2. Deposit and Withdrawal Time Frames
  3. Allowable deposits
  4. Deposit Limitations
  5. Notification of Banks

Formula Computation

  1. Purpose of Computation
  2. Includable
  3. Excludable items
  4. Stock record allocation
  5. Components of formula
  6. Hindsight Deficiencies
  7. PAB Computation

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2023 Training Calendar

Training Catalogue

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