Are your customer accounts in order? – SEC announces sweep of broker-dealers and implementation of the customer protection rule initiative

Abstract

Purpose

To explain the Customer Protection Rule Initiative announced by the Securities and Exchange Commission (SEC) and offer practical guidance for complying with Rule 15c3-3 under the Securities Exchange Act of 1934.

Design/methodology/approach

This article discusses Rule 15c3-3 under the Securities Exchange Act of 1934, related interpretative guidance, and the Customer Protection Rule Initiative announced in June 2016 by the SEC.

Findings

This article concludes that broker-dealers should take advantage of the Customer Protection Rule Initiative’s self-reporting mechanism and use this time to review their current account arrangements with banks, existing internal policies and procedures, and account documentation.

Originality/value

This article contains valuable information about the SEC’s Customer Protection Rule Initiative and practical compliance guidance from experienced securities lawyers.

Citation

Mitchum, M.B. and Xiong, B. (2017), "Are your customer accounts in order? – SEC announces sweep of broker-dealers and implementation of the customer protection rule initiative", Journal of Investment Compliance, Vol. 18 No. 1, pp. 68-74. https://doi.org/10.1108/JOIC-02-2017-0009