In response to inquiries from members, the new FAQ covers, among other things:
- what constitutes "free credit balance" in cash and securities margin accounts;
- whether credit and debit balances either in separate sub-accounts or in different accounts of the same person (to the limited extent permitted under Regulation T) should be netted in customer statements;
- if a firm does not maintain for the customer the aforementioned separate sub-accounts, (i) whether a firm should report the net balance of a customer's margin account and (ii) how the short positions should be valued;
- how balances in security-based swap account, in good faith accounts, and in non-purpose accounts should be reported or netted for reporting purposes;
- how obligations as to DVP/RVP transactions should be reported; and
- how foreign currency positions should be reported.
The FAQ highlights that: "Members should begin reporting debit balances and free credit balances consistent with this guidance as soon as practicable. Any member that believes it will need an extended period to implement this guidance should contact their Risk Monitoring Analyst to discuss an implementation timetable."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.