Broker Dealer Regulation - Financial Responsibilities - Comment Letter - JP Morgan - June 8, 2012

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Timeline, Financial Responsibility Rules for Broker Dealers
Re-proposal Date Final Rule Issue Effective Date
May 9, 2012 August 21, 2013 October 21, 2013

Amendments to Financial Responsibility Rules for Broker-Dealers
June 8, 2012

From the comment letter:

"Certain aspects of the proposed rules, e.g. the proposed limitations in the form of proposed paragraph lSC3-3 (e)(S), may result in additional administrative costs and may impose significant operational burden on certain broker-dealers. Hence we suggest considering whether the Commission's concerns could be better addressed through other prudential rules."

In response to the proposal, JP Morgan offers several observations:

  • The proposal does not cover credit risk of deposit taking bank.
  • The proposal creates operational burden potentially leading to operational risk.
  • There is a limitation to the number of available banks meeting broker-dealers' internal criteria.
  • Liquidity treatment requirements under Basel III rules may alter the funds which banks are willing to accept, and reduce the number of banks available to provide these services to broker-dealers.


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