Section 260.216.12 - Minimum Capital Requirement for Broker-Dealers(a) No broker-dealer shall permit its aggregate indebtedness to all other persons to exceed the limitations of 17 CFR 240.15c3 - and Appendices A through D thereto (Rule 15c3-1) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 USC 78a et seq.) and every broker-dealer shall have net capital necessary to comply with the conditions set forth in that rule.(b) Notification and Filings. Every broker-dealer shall notify, or file a specified document with, the Commissioner whenever Rule 15c3-1 requires a broker-dealer to notify, or file a specified document with, the Securities and Exchange Commission and/or Examining Authority. Such notification or filing shall be in the manner prescribed in the rule. Every broker-dealer shall also file with the Commissioner a copy of any exemption from Rule 15c3-1 granted by the Securities and Exchange Commission.(c) Examining Authority for Non-Registered Broker-Dealers. The term "Examining Authority" as used in Rule 15c3-1 shall mean, in the case of any non-registered broker-dealer, the Commissioner.(d) Exemption. The Commissioner may, upon written application, exempt from the provisions of subsection (a), either unconditionally or on specified terms and conditions, any broker-dealer who satisfies the Commissioner that, because of the special nature of its business, its financial position, and the safeguards it has established for the protection of its customers' funds and securities, it is not necessary in the public interest or for the protection of the investors to subject the particular broker-dealer to the specific provisions of Rule 15c3-1 insofar as it relates to a broker-dealer's requirements under subsection (a). The Commissioner may also exempt or otherwise reduce or adjust a broker-dealer's requirements under the terms and conditions provided in Rule 15c3-1 for such actions by the Securities and Exchange Commission and/or the Examining Authority.(e) Appendix C--Flow Through Capital Benefits. The Commissioner may permit consolidation in the same manner as the Securities and Exchange Commission pursuant to Appendix C to Rule 15c3-1.(f) Appendix D--Special Provisions. (1) Notwithstanding the provisions of Appendix D to Rule 15c3-1 regarding permissive payments, no prepayment of a subordinated indebtedness shall occur without the prior written approval of the Examining Authority for the broker-dealer and the Commissioner.(2) In the case of a non-registered broker-dealer, Events of Default in Subordination Agreements may include the revocation of the license of the broker-dealer by the Commissioner.Cal. Code Regs. Tit. 10, § 260.216.12
1. Repealer and new section filed 4-27-84; effective thirtieth day thereafter (Register 84, No. 18). For prior history, see Registers 79, No. 45; 79, No. 25; 78, No. 45; and 78, No. 22. Note: Authority cited: Sections 25216(c) and 25610, Corporations Code. Reference: Section 25216, Corporations Code.
1. Repealer and new section filed 4-27-84; effective thirtieth day thereafter (Register 84, No. 18). For prior history, see Registers 79, No. 45; 79, No. 25; 78, No. 45; and 78, No. 22.