SEC Allows Introducing Broker to Hold Funds Temporarily

The SEC Division of Trading and Markets (the "Division") granted no-action relief to an introducing broker from the requirement to transmit a customer's check (representing funds from a retirement account being rolled over into an IRA) to the clearing broker-dealer by noon of the next business day after receipt. The introducing broker argued that a day was not sufficient for it to perform a required suitability analysis with respect to the customer's reinvestment of the funds. The relief from SEA Rule 15c3-3 was granted, allowing the introducing broker to hold the funds for an additional seven business days subject to a number of conditions, including that it complete its suitability review during that time.