FINRA Extends Time Requests Relating to New SEA Rule 15c3-3(d)(4) (Regulatory Notice 14-13)

FINRA is updating the Regulatory Extension ("REX") system to enable firms to file extension of time requests relating to new Exchange Act Rule 15c3-3(d)(4) ("Customer Protection - Reserves and Custody of Securities"). The new rule, adopted by the SEC in July 2013, requires a broker-dealer to take steps to obtain physical possession or control over securities of the same issue and class as those included "on the broker's or dealer's books or records that allocate to a short position of the broker or dealer or a short position for another person, for more than 30 calendar days." Starting April 2, 2014, FINRA is allowing firms to file extension-of-time requests relating to the new Exchange Act Rule 15c3-3(d)(4). Firms may submit the extension-of-time requests on either the first or second business day following the 30th calendar day from the date on which the deficit under Rule 15c3-3(d)(4) is created.

See: Regulatory Notice 14-13.Related news: SEC Amends Capital and Custody Rules for Broker-Dealers (with Lofchie Comment) (July 31, 2013); SEC No-Action Letter: Classification of Certain Persons as Owners of Broker-Dealers (with Lofchie Comment) (January 23, 2013); SEC Issues No-Action Relief on Rule 15c3-3, Provides Extended Time for Broker-Segregated Deposits at U.S. Branches of Foreign Banks(February 27, 2014); SEC Issues No-Action Relief on Rule 15c3-3, Provides Extended Time for Consents to Sweep Accounts (February 27, 2014); FINRA Issues Information Notice on 2014 Holiday Trade Date, Settlement Date and Margin Extensions Schedule (December 23, 2013).