Broker-Dealer Notice of Net Capital Deficiency

PURPOSE: This rule requires broker-dealers to furnish the commissioner notice of impending net capital deficiency and announces that the commissioner, once a year and without prior notice, may require all registered broker-dealers to furnish a net capital report. (1) Every registered broker-dealer shall make a computation of its net capital and ratio of its aggregate indebtedness to its net capital not less than monthly and shall comply with the following requirements: (A) No withdrawal or any part of its net worth, including subordinated indebtedness, whether by redemption, retirement, repurchase, repayment or otherwise, shall be permitted or effected that will cause its net capital to be less than one hundred twenty percent (120%) of the amount prescribed in 15 CSR 30-59.100 or its aggregate indebtedness to exceed one thousand five hundred percent (1,500%) of its net capital, without notice to the commissioner as follows in subsections (1)(B) and (C) (section 409.858, RSMo); (B) Every broker-dealer to which this rule is applicable, whose net capital is less than one hundred twenty percent (120%) of the amount prescribed in 15 CSR 30-59.100 or whose aggregate indebtedness exceeds one thousand five hundred percent (1,500%) of its net capital, promptly shall notify the commissioner in writing of the deficiency and its extent; and (C) Every broker-dealer to which this rule is applicable shall file with the commissioner a report in writing on its net capital and ratio of its aggregate indebtedness to its net capital as of the end of each month in which its net capital is less than one hundred twenty percent (120%) of the amount prescribed in 15 CSR 30-59.100 or its aggregate indebtedness exceeds one thousand two hundred percent (1,200%) of its net capital, promptly after it has knowledge of that fact and in no event later than fifteen (15) days after the end of each such month. (2) The commissioner, in coordination with the securities administrators of other states and in addition to any other reports s/he may require, may require all registered brokerdealers to which section (1) is applicable to file reports on their net capital and aggregate indebtedness as of the end of any month, without prior notice, once during each year (section 409.858(2), RSMo). AUTHORITY: section 409.858, RSMo 2016.* This rule was previously filed as 15 CSR 3060.060. Emergency rule filed Oct. 2, 1985, effective Oct. 12, 1985, expired Feb. 9, 1986. Original rule filed Aug. 22, 1986, effective Jan. 30, 1987. Amended: Filed July 19, 2019, effective Jan. 30, 2020. *Original authority: 409.858, RSMo 1985.