Sec. 260.216.12.1 - Reserve and Custody Requirements

ยง 260.216.12.1. Reserve and Custody Requirements

(a) Every broker-dealer shall comply with the requirements of 17 CFR 240.15c3 - 3 (Rule 15c3-3) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 USC 78 a et seq.) relating to reserves and custody of securities requirements.

(b) Notification and Filings. Every broker-dealer shall notify, or file a specified document with, or make records available to, the Commissioner whenever Rule 15c3-3 requires a broker-dealer to notify, or make records available to, or file a specified document with, the Securities and Exchange Commission and/or Examining Authority as defined in Rule 15c3-1 (17 CFR 240.15c3 - 1). Such notification or filing shall be in the manner prescribed in Rule 15c3-3.

(c) Control of Securities. Securities under the control of the broker-dealer shall be deemed to be securities which, in addition to those specified in Rule 15c3-3 are held in such other locations as the Commissioner shall upon application from a broker-dealer find and designate to be adequate for the protection of customer securities.

(d) Examining Authority for Nonregistered Broker-Dealers. The term "Examining Authority" as used in Rule 15c3-3 shall mean, in the case of any nonregistered broker-dealer, the Commissioner.

(e) Exemption. Upon written application by a broker-dealer, the Commissioner may exempt such broker-dealer from the provisions of this section, either conditionally or on specified terms or conditions, if the Commissioner finds that the broker-dealer has established safeguards for the protection of funds or securities for customers comparable to those provided for by Rule 15c3-3 and that it is not necessary in the public interest or for the protection of investors to subject the particular broker-dealer to the provisions of this section.

(f) References to Securities and Exchange Rules. For purposes of this section, the following references to rules of the Securities and Exchange Commission in Rule 15c3-3 shall mean references to corresponding rules of the Commissioner as set forth in this Chapter 3:

(1) Rule 8c-1 (17 CFR 240.8c-1) and 15c2-1 (17 CFR 240.15c2 - 1) shall mean Section 260.216.8.

(2) Rule 15c3-1 (17 CFR 240.15c3 - 1) shall mean Section260.216.12.

(3) Rule 17a-3 (17 CFR 240.17a-3) shall mean Section 260.241.

(4) Rule 17a-4 (17 CFR 240.17a-4) shall mean Section260.241.2.

(5) Rule 17a-5 (17 CFR 240.17a-5) shall mean Section260.241.2.

(6) Rule 17a-13 (17 CFR 240.17a-13) shall mean Section260.241.6.

(1. Repealer and new section filed 4-27-84; effective thirtieth day thereafter (Register 84, No. 18). For prior history, see Registers 78, No. 22; 76, No. 1; 75, No. 4; and 74, No. 9.)

Note: Authority cited: Sections 25216(c) and 25610, Corporations Code. Reference: Section 24216, Corporations Code.

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