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IM-1014-1. Evidence of Ability to Satisfy Unpaid Arbitration Awards, Other Adjudicated Customer Awards, Unpaid Arbitration Settlements or, for New Member Applications, Pending Arbitration Claims

To the extent that the Applicant or Associated Person is subject to unpaid arbitration awards, other adjudicated customer awards, unpaid arbitration settlements or, for new member applications, pending arbitration claims, the Applicant may submit with an application documentation that evidences the ability to satisfy all such awards, settlements or claims through supporting documentation. Such documentation may include an escrow agreement, insurance coverage, a clearing deposit, a guarantee, a reserve fund or the retention of proceeds from an asset transfer, or such other forms that the Department may determine to be acceptable. The Applicant may provide a written opinion of an independent, reputable U.S. licensed counsel knowledgeable as to the value of such arbitration claims. To overcome the presumption to deny the application, the Applicant must guarantee that any funds used to evidence the Applicant's ability to satisfy any awards, settlements or claims will be used for that purpose. Any demonstration by an Applicant of its ability to satisfy these outstanding obligations will be subject to a reasonableness assessment by the Department.
Adopted by SR-FINRA-2019-030 eff. Sept. 14, 2020.

Selected Notice: 20-15.