Temporary Subordinated Loan Agreement


(ii) Notwithstanding the provisions of paragraph b) (8) of this appendix, the obligation of the broker or trader to pay for a subordination agreement, as well as accrued interest and compensation in the event of insolvency, are: Bankruptcy, liquidation under the Securities Investor Protection Act of 1970 or in some other way, bankruptcy, transfer to creditors , reorganization, whether under bankruptcy law or not, or any other den of the broker`s or trader`s assets and liabilities but the lender`s right to pay, with accrued interest or allowances, remains subordinated, as required by the provisions of 17 CFR 240.15c3-1 and 240.15c3-1d. (3) Some legends. If all the provisions of a satisfactory subordination agreement do not appear in a single deed, the bond or other debtors carry an appropriate legend that it is issued subject to the provisions of a satisfactory subordination agreement, to which it is appropriately referred to and inserted by reference. In general, brokers and traders use subordinated and securities-backed bonds (so-called subordinations) to borrow funds or securities from investors in order to increase their regulatory net capital. In accordance with FINRA Rule 4110 (e) (1), subordinations must be approved by FINRA in order to obtain favourable regulatory treatment for capital. (5) Certain rights of the broker or trader. The bid agreement provides that the broker or trader has the right: (ii) the broker or trader has not communicated to the regional office of the region where the broker or trader declares its head office (if a regional office is not its audit authority), copies of a proposed subordination agreement or the statement described above, if the audit authority has given its approval to that broker or trader. , in the Commission`s periodic reports (no less than every month) the subordination agreements approved for this period. These reports should include at least the amount of the loan and its duration, the lender`s name and the lender`s business relationship with the broker or trader. (E) in the event of continued non-compliance with the agreements reached in the subordination agreement relating to the broker`s or trader`s activity or in relation to the maintenance and reporting of his financial situation; and (iii) The application guarantee agreement may also provide that the lender, with the prior written consent of the broker or trader, and the broker or trader`s audit authority, instead of the procedures provided for in paragraph b) 6) (ii) of this section, may reduce the unpaid principal amount of the secured debt bond.

After this reduction, the total debt of the broker or trader may not exceed 1000% of its net capital or: in the case of a broker or trader operating in accordance with paragraph a) (1) (ii) of the S. 240.15c3-1, net capital may not be less than 5% of aggregate credit positions calculated in accordance with the provisions of paragraph 240.15c3 to 3 bis or , if registered as a forward commission, 7% of the funds that must be separated under the Commodity Data Exchange Act and the rules that are subject to it (minus the market value of options purchased by options subject to the rules of a contract, each of these deductions must not exceed the amount of funds on the option`s client account) , if it is more important.