Rule 420. Reports of Borrowings and Subordinate Loans For Capital Purposes
This rule is no longer applicable. NYSE Rule 420 has been superseded by FINRA Rule 4110. Please consult the appropriate FINRA Rule.
Before a subordinated loan of cash to a member organization may be considered for net capital purposes under Rule 325 the following documents shall be submitted to and approved by the Exchange:
Where a person wishes to make securities which are fully paid for and non-assessable available to a member organization in a manner that will increase the organization's net capital under Rule 325, the securities must be pledged as collateral to a secured demand note which is contributed to the member organization pursuant to a secured demand note collateral agreement. Both the form of the secured demand note and the secured demand note collateral agreement shall be approved by the Exchange prior to becoming effective. In order to be approved by the Exchange such notes and agreements:
Each general partner of a member firm shall promptly report to the Exchange any secured or unsecured borrowing of cash or securities regardless of its amount or description where the cash proceeds of such borrowing or the securities borrowed will be contributed to the capital of the member firm under Rule 104.20 or Rule 325.
The Exchange requires that the documents which evidence such borrowings conform to such standards as the Exchange deems appropriate to ensure the continued financial responsibility and operational capability of the member firm, and that the following documents be submitted to and approved by the Exchange before the cash or securities involved may qualify as capital acceptable for inclusion in the computation of net capital of the member firm under Rule 104.20 or Rule 325:
Amendments. May 21, 1970. October 16, 1975; effective January 1, 1976. February 15, 1980. September 20, 1983. |