California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.216.12 - Minimum Capital Requirement for Broker-Dealers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(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.