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