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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 ''But''.
-In a nutshell, the SEC no-action letter relating to prime brokerage of January 25, 1994 confirms that a cash trade executed by a customer with an executing broker for [[give-up]] to a [[prime broker]] does not violate the “free-rider” rule in [[Regulation T]]. In saying this, the no-action letter does have a rather succinct description of what prime brokerage, for the most part, is. Made somewhat succincter, the [[JC]] reads the gist as follows:
+In a nutshell, the SEC no-action letter relating to prime brokerage of January 25, 1994 confirms that a cash trade executed by a customer with an executing broker for [[give-up]] to a [[prime broker]] does not violate the “free-rider” rule in [[Regulation T]].
+Thus, once you have your BAU operational framework set up, [[Regulation T]] is not really something that should trouble the [[legal eagle]]s, at least from a documentation perspective, prescribing as it does how the business should operate, not how it is documented.
+In saying this, the no-action letter does have a rather succinct description of what prime brokerage, for the most part, is. Made somewhat succincter, the [[JC]] reads the gist as follows:
 {{quote|[[Prime brokerage]] is the process by which a registered broker-dealer clears and settles of securities trades for its customers. It involves three distinct parties: the [[prime broker]], the [[executing broker]], and the [[customer]].