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SEC no-action letter relating to prime brokerage: Difference between revisions
SEC no-action letter relating to prime brokerage (view source)
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The prime broker committee, chaired by Bear Stearns (remember them?) sought clarity from the SEC that a normal PB settlement would not be. It proposed to treat the “trade settlement” transaction between the [[prime broker]] and [[executing broker]] as an inter-dealer (principal) trade even though theoretically executed as [[agent]] for the customer. The SEC granted it, in the no-action letter. | The prime broker committee, chaired by Bear Stearns (remember them?) sought clarity from the SEC that a normal PB settlement would not be. It proposed to treat the “trade settlement” transaction between the [[prime broker]] and [[executing broker]] as an inter-dealer (principal) trade even though theoretically executed as [[agent]] for the customer. The SEC granted it, in the no-action letter. | ||
===Terms=== | |||
The SEC Enfrocement Division will not recommend that the Commission take enforcement action if, under such a prime broker arrangement, the executing broker and prime broker treat the customer account as if it were a broker-dealer credit account under [[Regulation T]] and: | |||
*[.. | |||
{{sa}} | {{sa}} | ||
*[https://www.sec.gov/divisions/marketreg/mr-noaction/pbroker012594-out.pdf The famous SEC no-action letter] | *[https://www.sec.gov/divisions/marketreg/mr-noaction/pbroker012594-out.pdf The famous SEC no-action letter] | ||