Regulatory Notice 08-65

FINRA Grants Additional, Temporary Relief from the Net Capital, Reserve Formula, Non-purpose Loan, and Maintenance Margin Requirements Applicable to Credit Extended on Auction Rate Securities to Broker-Dealers That Agree to Buy Back Auction Rate Securities

Effective Date: November 4, 2008

This Notice advises FINRA member firms that FINRA is granting additional, temporary relief from the net capital (SEA Rule 15c3-1), reserve formula (SEA Rule 15c3-3), non-purpose loan (Regulation T 220.6), and maintenance margin requirements (NASD Rule 2520(f)(8)(A) and NYSE Rule 431(f)(8)(A)) applicable to credit extended on auction rate securities (ARS) to brokerdealers who have agreed to implement buyback programs for auction rate securities. Terms of the relief are detailed in a letter to the SEC, included as Attachment A.

Questions concerning this Notice should be directed to:

  • Yui Chan,Managing Director, Risk Oversight and Operational Regulation, at (646) 315-8426;
  • Glen Garofalo, Director, Credit Regulation, at (646) 315-8464;
  • Rudolph Verra,Managing Director, Risk Oversight and Operational Regulation, at (646) 315-8811; or 
  • Steve Yannolo, Principal Credit Specialist, Credit Regulation, at (646) 315-8621.