FINRA Provides Guidance for Members Handling Balances at Failed Banks

FINRA provided guidance for members handling deposits, withdrawals and account balances held at Silicon Valley Bank, N.A. and Signature Bank, N.A.

In FINRA Regulatory Notice 23-04, FINRA stated:

  • all bank deposits at SVB and SB may continue to be treated as allowable assets for net capital purposes;
  • balances in customer and "PAB Reserve Bank Accounts" at both failed banks may continue to be treated as qualified reserve bank account deposits for purposes of Exchange Act Rule 15c3-3(e) ("Customer protection-reserves and custody of securities"); and
  • withdrawals of any funds from accounts held at SVB and SB must comply with the requirements of all applicable rules, including Exchange Act Rules 15c3-1(e) ("Net capital requirements for brokers or dealers") and 15c3-3(e)(1).

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