Anthony,
Actually, we're both right. My question for you is, for a $5,000 minimum net cap BD (usually one of those mutual fund only deals) to trade for their proprietary account, who defines (or is it a floating, subjective judgement) what "occasional" is?
First:
"$5,000 and $50,000 introducing broker-dealers may only do occasional trades for their own accounts. They may not act as dealers or market makers. $100,000 broker-dealers may act as dealers and market-makers."
and then:
"In addition to the requirements previously discussed, a market maker in securities is required to maintain a dollar amount of net capital for each stock in which he makes a market. The amount required is $2,500 for each stock selling above $5.00 a share; and $1,000 for each stock selling for $5.00 or less per share. The maximum requirement for a market maker, regardless of the number of stocks for which he makes a market, is $1,000,000."
So, at what point do the regulators step in and make a 5K BD suddenly have to add $95K of net cap and between 1 and 2.5K per stock to continue their business?
LPS5 |
