Financial Responsibility and Net Capital Requirements

Financial responsibility rules are operational, but they protect the entire customer relationship. The Series 7 expects you to know why broker-dealers must maintain net capital, segregate customer assets, and keep reliable records that regulators can test.

This chapter starts with the net capital rule, then covers customer protection and reserve requirements, and ends with the books-and-records framework that supports examination and enforcement.

In this section

• Net Capital Rule
  Review SEC Rule 15c3-1, minimum net capital, and aggregate-indebtedness concepts.
• Customer Protection Rule
  Understand reserve computations, possession and control requirements, and the purpose of SEC Rule 15c3-3.
• Books and Records Requirements
  Review financial and customer records and the retention rules that support broker-dealer supervision.