SEC Division of Trading and Markets Staff recently issued a No-Action Letter allowing a group of introducing brokers more time to transmit customer checks.
Introducing brokers enjoy a lighter level of regulation than clearing brokers, but they must meet certain requirements to qualify. One such requirement is that they “promptly” transmit customer funds to their clearing brokers. A group of introducing broker-dealers received a No-Action letter allowing them more time to transmit customer funds, contingent on fulfilling other conditions in the letter.
The brokers represented that they were “engaged in the retail distribution of multiple types of financial instruments” (but also that “none of the Firms maintain proprietary positions for sales to customers.”) Earlier no-action letters in this area were limited to different situations.