Series 24 Financial Responsibility Net
Capital Rule
Clearing Broker-Dealer = $250,000 - correct answer ✔Net Capital Dollar
Requirement of Clearing Broker-Dealer
Solely sells limited partnerships - correct answer ✔DPP BD $5,000 NC
$50,000 - correct answer ✔Net Capital Dollar Requirement of Fully
Disclosed Broker Dealer that receives Securities
$5,000 - correct answer ✔Net Capital Dollar Requirement of Fully disclosed
Broker Dealer which does not receive Securities
It must be liquid
The liquidation value should approximate the stated value on the broker-
dealer's books
Cash in a Special Reserve Bank Account is segregated cash explicitly
designated for use to pay off customer claims if the firm should liquidate.
Fails to deliver
Collateralized receivables - correct answer ✔For an Asset to be "allowable"
for net capital purposes
Prepaid expenses
Uncollateralized receivables - correct answer ✔Not allowable assets for net
capital purposes
, yes - correct answer ✔Does a proper subordinated loan count as part of a
firm's total available capital?
Federal Reserve Regulation U - correct answer ✔When a broker-dealer
enters into a secured demand note agreement with a lender, the lender
pledges securities to the broker. In turn, the broker repledges these "street
name" securities to a bank for a loan. The amount that can be borrowed by
brokers from banks using securities as collateral is determined by...
offset, Aggregate Indebtedness - correct answer ✔Any funds that are on
deposit in a Special Reserve Bank account are _______________ against the
firm's _________________ balance for purposes of the AI/NC ratio test.
10% - correct answer ✔An undue concentration haircut is applied if one non-
exempt security position exceeds ______% of Tentative Net Capital
15% on the full amount and an additional 15% on the amount over 10% of
Tentative Capital. - correct answer ✔What percentage is taken on a non-
exempt security position that exceeds 10% of Tentative Capital.
40% - correct answer ✔If there are 1 or 2 market makers in a security aside
from this firm, the trading market is limited. In this case, the haircut
percentage is increased to ____%.
100% - correct answer ✔If there are no market makers aside from this firm,
the haircut becomes ____%
None - correct answer ✔What impact does a fail to receive for the firm's
account that is unsold have on aggregate indebtedness?
Capital Rule
Clearing Broker-Dealer = $250,000 - correct answer ✔Net Capital Dollar
Requirement of Clearing Broker-Dealer
Solely sells limited partnerships - correct answer ✔DPP BD $5,000 NC
$50,000 - correct answer ✔Net Capital Dollar Requirement of Fully
Disclosed Broker Dealer that receives Securities
$5,000 - correct answer ✔Net Capital Dollar Requirement of Fully disclosed
Broker Dealer which does not receive Securities
It must be liquid
The liquidation value should approximate the stated value on the broker-
dealer's books
Cash in a Special Reserve Bank Account is segregated cash explicitly
designated for use to pay off customer claims if the firm should liquidate.
Fails to deliver
Collateralized receivables - correct answer ✔For an Asset to be "allowable"
for net capital purposes
Prepaid expenses
Uncollateralized receivables - correct answer ✔Not allowable assets for net
capital purposes
, yes - correct answer ✔Does a proper subordinated loan count as part of a
firm's total available capital?
Federal Reserve Regulation U - correct answer ✔When a broker-dealer
enters into a secured demand note agreement with a lender, the lender
pledges securities to the broker. In turn, the broker repledges these "street
name" securities to a bank for a loan. The amount that can be borrowed by
brokers from banks using securities as collateral is determined by...
offset, Aggregate Indebtedness - correct answer ✔Any funds that are on
deposit in a Special Reserve Bank account are _______________ against the
firm's _________________ balance for purposes of the AI/NC ratio test.
10% - correct answer ✔An undue concentration haircut is applied if one non-
exempt security position exceeds ______% of Tentative Net Capital
15% on the full amount and an additional 15% on the amount over 10% of
Tentative Capital. - correct answer ✔What percentage is taken on a non-
exempt security position that exceeds 10% of Tentative Capital.
40% - correct answer ✔If there are 1 or 2 market makers in a security aside
from this firm, the trading market is limited. In this case, the haircut
percentage is increased to ____%.
100% - correct answer ✔If there are no market makers aside from this firm,
the haircut becomes ____%
None - correct answer ✔What impact does a fail to receive for the firm's
account that is unsold have on aggregate indebtedness?
