PURPOSE: This rule prescribes the minimum net capital and ratio between net capital and aggregate indebtedness required of registered broker-dealers.

1. (1) A broker-dealer registered with the Securities and Exchange Commission shall maintain net capital requirements in accordance with rule 15c3-1 under the Securities Exchange Act of 1934.

2. (2) A broker-dealer not registered with the SEC shall have the net capital necessary to comply with all of the following conditions:

   1. (A) The aggregate indebtedness to all other persons of a broker-dealer who has been registered under the Act for at least one (1) year shall not exceed two thousand percent (2,000%) of his/her net capital. The aggregate indebtedness to all other persons of a broker-dealer who has been registered under the Act for less than one (1) year shall not exceed one thousand percent (1,000%) of his/her net capital; and
   2. (B) S/he shall have and maintain net capital of not less than ten thousand dollars ($10,000).
3. (3) The commissioner, by order, which may apply individually or to a class, may establish a lower net capital requirement, a lower cash reserve requirement, or a higher maximum ratio of aggregate indebtedness to net capital either unconditionally or upon special terms or conditions, for a broker-dealer who satisfies the commissioner that because of the special nature of his/her business and his/her financial condition and the safeguards that have been established for the protection of customers’ funds, investors would not be adversely affected.
4. (4) A broker-dealer not in compliance with the aggregate indebtedness, net capital or cash reserve requirements shall cease soliciting new business and shall immediately notify the commissioner in writing.
5. (5) For the purposes of this rule and to insure uniform interpretation, the terms aggregate indebtedness and net capital shall have the respective meanings as defined in rule 15c3-1 under the Securities Exchange Act of 1934. A copy of any pertinent subordination agreement shall be filed with the commissioner within ten (10) days after the agreement has been entered into and shall meet the requirements of a satisfactory subordination agreement as that term is defined in rule 15c3-1.

AUTHORITY: sections 409.202 and 409.413(a), RSMo 1986.* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Amended: Filed Dec. 19, 1975, effective Dec. 31, 1975. Amended: Filed Aug. 11, 1978, effective Feb. 11, 1979.

*Original authority: 409.202, RSMo 1967, amended 1977, 1978, 1986 and 409.413, RSMo 1967.