Ap,
The assertion that broker dealers might be categorized as "daytrading brokers" (vs. "investment brokers") is laughable. No.
Instead, the particular firms' SROs (self-regulatory organizations) - for the purposes of minimum net capital requirement and compliance determinations - categorize them in terms of the activities they pledge to conduct. "Daytrading" is not currently one of the options.
Clearing firms, on the other hand, may and do set different margin policies for particular types of accounts held with them via a particular correspondent.
In other words, ABC Securities may have some customers who disclose their intent to "daytrade" their accounts (as per recent NASD & NYSE definitions), and others who are in line with the more "traditional" (whatever that is) trading/investing profile, but ABC Securities itself is not in any way indicated as a "daytrading" or "investment" broker or anything else of that sort.
IMHO, "customer daytrading" or something to that effect will eventually be included among these classifications. At this point, the determination is made at the customer (new account) level for suitability and (for some clearing firms) lending purposes, and not at the member firm level, as was suggested.
Some examples of how regulators do define the business activities of particular firms follow.
Advisor on mergers, acquisitions, and corporate financing.
Broker or dealer making inter-dealer markets in corporate securities over-the-counter.
Broker or dealer retailing corporate equity securities over-the-counter.
Broker or dealer selling corporate debt securities.
Broker or dealer selling interests in mortgages or other receivables.
Broker or dealer selling securities of non-profit organizations (e.g., churches, hospitals).
Broker or dealer selling variable life insurance or annuities.
Exchange member engaged in exchange commission business other than floor activities.
Exchange member engaged in floor activities.
Government securities dealer.
Government securities broker.
Investment advisory services.
Municipal securities dealer.
Municipal securities broker.
Mutual fund retailer.
Private placements of securities.
Put and call broker or dealer or option writer.
Trading securities for own account.
Underwriter or selling group participant (corporate securities other than mutual funds).
ECNs and other ATS used to have their particular business activities described as "Other," but now describe specifically what their systems do and entail.
LPS5 |
