Rule 325. Capital Requirements Member Organizations
This rule is no longer applicable. Incorporated NYSE Rule 325 has been superseded by FINRA Rules 4110, 4120, and 4521. Please consult the appropriate FINRA Rules.
General provisions
(a) Each member organization shall comply with the net capital requirements prescribed by Rule 15c3-1 under the Securities Exchange Act of 1934 (the "Exchange Act") and with the additional requirements of this Rule 325.
(b)
(1) Each member organization subject to this Rule shall promptly, but in any event within 24 hours, notify the Exchange if its net capital after deduction of all capital withdrawals (including maturities) scheduled during the next six months falls below the following percentages:
i. If the net capital minimum dollar amount requirement is applicable—150 percent thereof or some greater percentage as may from time to time be designated by the Exchange.
ii. If the ratio of aggregate indebtedness to net capital is applicable—10 percent of aggregate indebtedness.
iii. If the alternative net capital requirement percentage is applicable—five percent of the aggregate debit items in the Formula for Determination of Reserve Requirements for Brokers and Dealers under Exchange Act Rule 15c3-3.
iv. If the risk-based capital requirements of Commodity Exchange Act Rule 1.17 is applicable—120% of the risk-based capital requirements.
(2) Each member organization shall notify the Exchange, in writing, no more than 48 hours after its tentative net capital (net capital before application of haircuts and undue concentration charges), as computed pursuant to Exchange Act Rule 15c3-1, has declined 20 percent or more from the amount reported in its most recent FOCUS Report filed with the Exchange.
(3) Each member organization shall concurrently provide the Exchange with a copy of any report or notification made to the Securities and Exchange Commission pursuant to Exchange Act Rule 17a-11 or Commodities Exchange Act Regulation 1.12.
(c)
(1) In computing net capital, a long put option or a long call option which is not an obligation of a clearing agency registered under the Exchange Act, or has not been endorsed or guaranteed by a member organization, shall have no value and shall not operate to increase net capital under any provision of this Rule. However, this shall not apply to a member organization approved to use the alternative method of computing net capital pursuant to Exchange Act Rule 15c3-1e.
(2) In the case of member organizations whose trading shows a pattern of purchasing and selling the same listed stock on the same day, (or all member organizations when so designated by the Exchange), during the period in which any special margin requirement is in effect, any new proprietary transaction of members or member organizations resulting in a long or short position, shall, notwithstanding any other provision of this Rule, be treated as a "contractual commitment" from the trade date to the settlement date and shall be subject to a charge to net capital of the same percentage as specified in the special margin requirement, excepting in the case of the DMM in that stock or of others who at the request of a Floor Official have participated in a difficult market situation.
(d) The Exchange may at any time or from time to time with respect to a particular member organization or all member organizations or a new member organization prescribe greater net capital or net worth requirements than those prescribed under this Rule including more stringent treatment of items in computing net capital or net worth.
(See Rule 328 for information relating to sale and leasebacks, factoring, financing and similar arrangements, including fixed asset loan agreements, other deductible asset loan agreements, and collateral bank loans for the purpose of determining "ready market" for securities.)
(See Rule 328 for information relating to sale and leasebacks, factoring, financing and similar arrangements, including fixed asset loan agreements, other deductible asset loan agreements, and collateral bank loans for the purpose of determining "ready market" for securities.)
(e) In addition to the net capital requirement prescribed in Rule 15c3-1 promulgated under the Securities Exchange Act of 1934, each member organization which employs individuals to execute orders on the floor of the Exchange, must present evidence of financial responsibility in the amount of $100,000 for each such employee by one of the following methods;
(1) A written guarantee by a member organization which is a member of a qualified clearing agency and has excess net capital of not less than $100,000 for each member for whom such guarantee has been extended or
(2) $100,000 held by an independent agent in escrow, or
(3) a letter of credit issued by a bank or other party acceptable to the Exchange in the amount of $100,000, or
(4) marketable securities with a total value of at least $100,000 (after appropriate haircuts, to be determined in the same manner as haircuts are determined for capital requirements) on deposit with an organization acceptable to the Exchange and readily available, or
Such written guarantee, escrow account, letter of credit or marketable securities shall be available solely for sums due the Exchange and such sums as the Board of Directors shall determine are due by such member to member organizations as the result of losses arising directly from the closing out under the Rules, of contracts entered into, in the ordinary course of business in the market on the floor of the Exchange for the purchase, sale, borrowing or loaning of securities.
The Exchange will consider alternate methods of compliance with the financial responsibility standard.
The Exchange will consider alternate methods of compliance with the financial responsibility standard.
| Amendments. March 26, 1970. July 15, 1971. September 7, 1972. July 11, 1974; effective July 18, 1974. August 5, 1974. April 3, 1975; effective May 1, 1975. October 16, 1975; effective January 1, 1976. April 11, 1978. October 19, 1978. October 9, 1980. December 11, 1980 May 1, 1982. October 13, 1988. December 7, 1994. February 27, 2006, effective March 8, 2006 (NYSE-2005-77). March 29, 2007 (NYSE-2005-03). Amended by SR-FINRA-2009-025 eff. Apr. 7, 2009. |